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Just need the questions answered, please! Part I. The following information represents the base case for a stock: Do=$1.50, r=10%, and g= 2%. Calculate the

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Just need the questions answered, please!

Part I. The following information represents the base case for a stock: Do=$1.50, r=10%, and g= 2%. Calculate the stock's value. Place the value in the first row of data in the table below. Part II. Now calculate the value of the base case stock but assuming there is an abnormally high growth rate before the normal period begins. Do R G INTO INFINITY STOCK VALUE $1.50 $1.50 $1.50 $1.50 $1.50 10% 10% 10% 10% 10% G AND NUMBER OF ABNORMAL RETURN PERIODS none 5% for 2 periods 5% for 4 periods 10% for 2 periods 10% for 4 periods 2% 2% 2% 2% 2% $19.13 $20.22 $21.13 $22.33 $25.13 Part III. Answer the following questions based on your answers above. 1. In general, how does a period of positive non-constant growth higher than the constant growth rate affect the stock's value? Why? How would negative non- constant growth affect the stock's value? Why? How does the number of years of non-constant growth affect value? Why? 3. How does the rate of growth affect value? Why? 4. How do the number of years of non-constant growth combined with the rate of growth affect value? 5. What factors may cause a stock to have positive or negative non-constant| growth? Can these factors last forever? 2. 5. Part I. The following information represents the base case for a stock: Do=$1.50, r=10%, and g= 2%. Calculate the stock's value. Place the value in the first row of data in the table below. Part II. Now calculate the value of the base case stock but assuming there is an abnormally high growth rate before the normal period begins. Do R G INTO INFINITY STOCK VALUE $1.50 $1.50 $1.50 $1.50 $1.50 10% 10% 10% 10% 10% G AND NUMBER OF ABNORMAL RETURN PERIODS none 5% for 2 periods 5% for 4 periods 10% for 2 periods 10% for 4 periods 2% 2% 2% 2% 2% $19.13 $20.22 $21.13 $22.33 $25.13 Part III. Answer the following questions based on your answers above. 1. In general, how does a period of positive non-constant growth higher than the constant growth rate affect the stock's value? Why? How would negative non- constant growth affect the stock's value? Why? How does the number of years of non-constant growth affect value? Why? 3. How does the rate of growth affect value? Why? 4. How do the number of years of non-constant growth combined with the rate of growth affect value? 5. What factors may cause a stock to have positive or negative non-constant| growth? Can these factors last forever? 2. 5

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