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Jumbo Shrimp Oxymorons, Inc. recently paid a dividend of $2.03 per share. The firm expects explosive growth of 20% over the next two years. After
Jumbo Shrimp Oxymorons, Inc. recently paid a dividend of $2.03 per share. The firm expects explosive growth of 20% over the next two years. After that the firms managers expect that growth will drop to 14% for the following three years, then settle at 8% indefinitely.
If investors require a rate of return of 14.50 on Jumbos stock:
a. What will be the dividend paid out for the next six years? (Round your answers to 4 decimal places.)
D1 = | $ |
D2 = | $ |
D3 = | $ |
D4 = | $ |
D5 = | $ |
D6 = | $ |
|
b. What is its intrinsic value today? (Round your answer to 2 decimal places.)
Intrinsic value
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