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my teacher did not provide D0. please help 4, Cyberstic, Inc.has supernormal growth of g-30%for 3 years before achieving long-run constant growth of 6% and
my teacher did not provide D0. please help
4, Cyberstic, Inc.has supernormal growth of g-30%for 3 years before achieving long-run constant growth of 6% and a r-13%. STEP 1: What will the dividends be in the 3 years prior to constant growth: (Do (1+g) D1 D2 D3 STEP 2: Determine the value P in the year before the first 'constant growth" dividend is paid. [horizon or terminal value] P3 D3(1+g)/(r-g) STEP 3: Discount all cash flows [divs & future value of P) by discount rate back to today. [uneven cash flows on the calculator] a. NPV or Po b. What is the Divident Yield for year 1 [Po)? c. What is the Capital Gains Yield for year 1? 4, Cyberstic, Inc.has supernormal growth of g-30%for 3 years before achieving long-run constant growth of 6% and a r-13%. STEP 1: What will the dividends be in the 3 years prior to constant growth: (Do (1+g) D1 D2 D3 STEP 2: Determine the value P in the year before the first 'constant growth" dividend is paid. [horizon or terminal value] P3 D3(1+g)/(r-g) STEP 3: Discount all cash flows [divs & future value of P) by discount rate back to today. [uneven cash flows on the calculator] a. NPV or Po b. What is the Divident Yield for year 1 [Po)? c. What is the Capital Gains Yield for year 1Step by Step Solution
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