please do number 5 and 6 and show all work and formulas!!
5. Now assume that Temp Force's dividend is expected to experience supernormal growth of 30% from Year 0 to Year 1, 20% from Year 1 to Year 2, and 10% from Year 2 to Year 3. After Year 3, dividends will grow at a constant rate of 6%. What is the stock's intrinsic value under these conditions? What are the expected dividend yield and capital gains yield during the first-year? What are the expected dividend yield and capital gains yield during the fourth year (from year 3 to year 4)? D0= $2.00 next we compute D1=2.00*(1.30)=$2.60 which is the growth from year 0 to year 1.. Next, D2=2.60*(1.20= $3.12, which is the growth from Year 1 to Year 2. Lastly, D3= 3.12(1.10)=$3.43 which is Year 2 to Year 3. 6. Is the stock price based more on long-term or short-term expectations? Answer this by finding the percentage of Temp Force's current stock price that is based on dividends expected more than 3 years in the future. Stock Valuation Sam Strother and Shawna Tibbs are senior vice presidents of Mutual of Seattle. They are co-directors of the company's pension-fund management division, with Strother having responsibility for fixed income securities (primarily bonds) and Tibbs responsible for equity investments. A major new client, the Northwestern Municipal Alliance, has requested that Mutual of Seattle present an investment seminar to the mayors of the cities in the association, and Strother and Tibbs, who will make the actual presentation, have asked you to help them. To illustrate the common stock valuation process, Strother and Tibbs have asked you to analyze the Temp Force Company, an employment agency that supplies word processor operators and computer programmers to businesses with temporarily heavy workloads. You are expected to answer the following questions: 5. Now assume that Temp Force's dividend is expected to experience supernormal growth of 30% from Year 0 to Year 1, 20% from Year 1 to Year 2, and 10% from Year 2 to Year 3. After Year 3, dividends will grow at a constant rate of 6%. What is the stock's intrinsic value under these conditions? What are the expected dividend yield and capital gains yield during the first-year? What are the expected dividend yield and capital gains yield during the fourth year (from year 3 to year 4)? D0= $2.00 next we compute D1=2.00*(1.30)=$2.60 which is the growth from year 0 to year 1.. Next, D2=2.60*(1.20= $3.12, which is the growth from Year 1 to Year 2. Lastly, D3= 3.12(1.10)=$3.43 which is Year 2 to Year 3. 6. Is the stock price based more on long-term or short-term expectations? Answer this by finding the percentage of Temp Force's current stock price that is based on dividends expected more than 3 years in the future. Stock Valuation Sam Strother and Shawna Tibbs are senior vice presidents of Mutual of Seattle. They are co-directors of the company's pension-fund management division, with Strother having responsibility for fixed income securities (primarily bonds) and Tibbs responsible for equity investments. A major new client, the Northwestern Municipal Alliance, has requested that Mutual of Seattle present an investment seminar to the mayors of the cities in the association, and Strother and Tibbs, who will make the actual presentation, have asked you to help them. To illustrate the common stock valuation process, Strother and Tibbs have asked you to analyze the Temp Force Company, an employment agency that supplies word processor operators and computer programmers to businesses with temporarily heavy workloads. You are expected to answer the following questions