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Question 2. (Stock Valuation) Solve the following questions (30 points) (1) Find out values of following stocks. The discount rate is 8% (15 points) Stock
Question 2. (Stock Valuation) Solve the following questions (30 points) (1) Find out values of following stocks. The discount rate is 8% (15 points) Stock A: recently paid dividend = $ 3 per share, dividend growth rate as 0% Stock B: recently paid dividend = $ 6 per share, dividend growth rate as 4% Stock C: EPS = $ 15, benchmark PER = 3 (2) Firm A has recently paid dividend of $ 14 per share. It is expected that firm A will grow by 15% for next six years and 5% thereafter. It is also known that firm A's beta is 1.5, risk free rate is 1%, and market risk premium is 6%. Estimate the stock value of firm A
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