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Nonconstant Growth Valuation Holt Enterprises recently paid a dividend, D 0 , of $2.75. It expects to have nonconstant growth of 18% for 2 years
Nonconstant Growth Valuation
Holt Enterprises recently paid a dividend, D0, of $2.75. It expects to have nonconstant growth of 18% for 2 years followed by a constant rate of 6% thereafter. The firm's required rate of return is 12%.
a. How far away is the horizon date?
b. What is the firm's horizon, or continuing, value?
c. What is the firm's intrinsic value today, P0?
Please show all the math worked out! Thank you.
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