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Please help with the yellow highlighted cells. 54 2. Assume that Temp Force is a constant growth company whose last dividend (Do, which was paid
Please help with the yellow highlighted cells.
54 2. Assume that Temp Force is a constant growth company whose last dividend (Do, which was paid yesterday) was $2.00 and 55 whose dividend is expected to grow indefinitely at a 6% rate. 56 (1.) What is the firm's current stock price? 57 (2.) What is the stock's expected value 1 year from now? 58 (3.) What are the expected dividend yield, the capital gains yield, and the total return during the first year? 59 60 61 Constant Growth Model: 62 INPUTS: 63 D = $2.00 64 GL = 6% 65 13.0% 66 67 D D. (1 + g) Po = 68 (rs -9) (rs-GL) 69 70 D = D. (1 + g.) = $2.12 71 72 D1 $2.12 Po = 73 (rs-g.) 0.07 74 75 P = $30.29 76 77 78 Stock Price 1 year from now: 79 80 D2 P1 = 81 (rs -9L) 82 83 D2 = D. (1+g.) = 84 85 P = 86 87 88 P= 89 90 Dividend Yield = D CG (Capital Gain) Yield = P-P. 91 PO 92 93 Dividend Yield = CG Yield = 94 95 96 Dividend Yield = CG Yield = 97 98 99 Dividend CG 100 Total Yield = Yield Yield 101 102 Total Yield = +
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