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Hi, Could you show me how to solve for NPV using only financial calculator please? Thank you very much in advance! 8.2 = $39.67 Notice
Hi, Could you show me how to solve for NPV using only financial calculator please?
Thank you very much in advance!
8.2 = $39.67 Notice that both approaches yield the same price in five years. In this scenario, we have supernormal growth for the next three years. We'll need to calculate the dividends during the rapid growth period and the stock price in three years. The dividends are: D = $2.00 x 1.20 = $2.400 D = $2.40 x 1.20 = $2.880 D = $2.88 X 1.20 = $3.456 After three years, the growth rate falls to 8 percent indefinitely. The price at that time. P, is thus: P, = DX(1 + g)/(R-8) = $3.456 X 1.08/(.16 - .08) = $3.7325/.08 = $46.656 To complete the calculation of the stock's present value, we have to determine the present value of the three dividends and the future price: D D D P (1 + R)! *(1 + R)? '(1 + R) (1 + R) $2.40 2.88 + 3.456 _ 46.656 | 1.16 * 1.162 1.16 1.16 = $2.07 + 2.14 + 2.21 + 29.89 = $36.31Step by Step Solution
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