Holt Enterprises recently paid a dividend, D0, of $2.75. It expects to have nonconstant growth of 12% for 2 years followed by a constant rate of 3% thereafter. The firm's required return is 18%.

1. How far away is the horizon date?
   
   1. The terminal, or horizon, date is Year 0 since the value of a common stock is the present value of all future expected dividends at time zero.
   2. The terminal, or horizon, date is the date when the growth rate becomes nonconstant. This occurs at time zero.
   3. The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the beginning of Year 2.
   4. The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the end of Year 2.
   5. The terminal, or horizon, date is infinity since common stocks do not have a maturity date.
   
   -Select-IIIIIIIVVItem 1
   
   
2. What is the firm's horizon, or continuing, value? Do not round intermediate calculations. Round your answer to the nearest cent.

   $

3. What is the firm's intrinsic value today, ? Do not round intermediate calculations. Round your answer to the nearest cent.

   $

2. Problem 9.04 (Noncenstant Growth Valuation) a. How far away is the horizon date? II. The terminat, of horion, date is the date when the growth rate becomes nonconstanc. This cocurs at time zeto. iit. The teminai, or horizon, date is the date when the growth rate becomes constant. This oceurs at the begining of var 2. IV. The terminal, or horiton, date is the date when the growth rate becones consint. This ccour at the end of Year 2. V. The terminat, or herion, date is infeity since cominun stacks so not heve a moturity dite