IFM13 Ch08 P24 Cameron Battle File Home InsertDraw Formulas Data ReviewView 1 Student 2 Chapter: 3 Problem 2/13/2017 Valuation of Stocks and Corporations 24 Hamilton Landscaping's dividend growth rate is expected to be 30% in the next year, drop to 15% from Year 1 to Year 2, and drop to a constant 5% for Year 2 and all subsequent years, Hamilton has just paid a dividend of $2.50 and its stock has a required return of 11% 8 10 a. What is Hamilton's estimated stock price today? $2.50 11.0% 30% 15% 5% 12 13 Short-run g; for Year 1 only Short-run g; for Year 2 only Long-run g, for Year 3 and all following years 15 16 17 18 19 20 21 91,2 30% 15% 5% 5% Year Dividend PV of dividends and PV of horizon value 24 25 26 - Horizon value P2 Ch 8-24 Build a Model Solution