Question
Portman Industries just paid a dividend of $1.44 per share. The company expects the coming year to be very profitable, and its dividend is expected
Portman Industries just paid a dividend of $1.44 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 16.00% over the next year. After the next year, though, Portmans dividend is expected to grow at a constant rate of 3.20% per year.
Assuming that the market is in equilibrium, use the information just given to complete the table.
Term | Value |
---|---|
Dividends one year from now (D) | |
Horizon value (P1P1) | |
Intrinsic value of Portmans stock |
The risk-free rate (rRFrRF) is 4.00%, the market risk premium (RPMRPM) is 4.80%, and Portmans beta is 1.30.
What is the expected dividend yield for Portmans stock today?
5.65%
6.84%
7.54%
7.06%
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