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help asapp Problem None-Constant Growth Corporation is a young start-up company and just paid dividend of $2.50 (D.). The firm is projecting the dividend to
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Problem None-Constant Growth Corporation is a young start-up company and just paid dividend of $2.50 (D.). The firm is projecting the dividend to grow by 15% over the next three years Chigh growth phase), before slowing down to a constant 6% growth rate from that point forward (after year three). Assume the company has a required return of 12% Using the timeline below, show and calculate: a) The dividend payments for year D, DD, and D. b) The terminal value horizon value at time 37 c) What is the intrinsic value (price) per share of the stock today! a) Time Line: Constant growth Nonconstant growth 5 1 2. b) d) Assume None-Constant Growth Corporation is expected to pay a constant dividend (perpetuity) of $4 after year 3 (Du = $4, Ds = $4, and so on). Assume everything else stays the same as stated under a), what should you pay for the stock today (P.)? Show all necessary calculations (just those calculations that are needed in addition to what you have shown already under a))! Note: D. D. D; are the same as under a), only the way you calculate the horizon value (P) changes due to the perpetuity Step by Step Solution
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