Holt Enterprises recently paid a dividend, Do, of $1.75. It expects to have nonconstant growth of 16% for 2 years followed by a constant rate of 5% thereafter. The firm's required return is 14%. a. How far away is the horizon date?

I. 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.

II. The terminal, or horizon, date is the date when the growth rate becomes nonconstant. This occurs at time zero.

III. The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the beginning of Year 2.

IV. The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the end of Year 2.

V. The terminal, or horizon, date is infinity since common stocks do not have a maturity date.

b. What is the firm's horizon, or continuing, value? Do not round intermediate calculations. Round your answer to the nearest cent.

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

Hoit Enterprises recently paid o dividend, Do, of 51:75. It expects to have nonconstant growth of 16% for 2 years followed by a canstant rate of 5% thereafar The firm's required feturn is 14%. a. Haw far away is the horizon date? 1. The terminal, or herizon, date is Year o since the value of a commen steck is the present value of all future expected dividends at time zera. 11. The terminal, or hortzon, date is the date when the growth rate becomes noncenstant. This occurn at time revo 1II. The terminal, or norizon, date is the date when the growth rate becomes constant. This occurs at the beginning of Vear 2 . FV. The terminal, or horizon, date is the date when the growth rate becomes censtant. This occurs at the ead of Vear 2. V, The terminal, or horzon, dote is infinity since common stocks do mot have a maturity date. s