Stock Valuation Questions - Please help.
Thank you
Assuming the same ' r ' and using the expected growth rate calculated previously, what is the value of stock for APPL assuming constant-growth? Use the annual dividend in 2022 as DO. Answer in the nearest tenth. Type your answer... 6 points Assuming the same ' r ' but using a different growth rate g=6%, what is the value of stock for APPL assuming constant growth? Use the annual dividend in 2022 as D0. Answer in the nearest tenth. \begin{tabular}{rrl} \multicolumn{1}{l}{ Date } & Dividends & Market Price at year end of 2022 \\ 2/9/2018 & 0.1575 & g \\ 5/11/2018 & 0.1825 & r \\ 8/10/2018 & 0.1825 & D0 \\ 11/8/2018 & 0.1825 & \\ 2/8/2019 & 0.1825 & Valuation \\ 5/10/2019 & 0.1925 & \\ 8/9/2019 & 0.1925 & zero-growth \\ 11/7/2019 & 0.1925 & \\ 2/7/2020 & 0.1925 & constant growth \\ 5/8/2020 & 0.205 & \\ 8/7/2020 & 0.205 & two-stage growth \\ 11/6/2020 & 0.205 & g1 \\ 2/5/2021 & 0.205 & g2 \\ 5/7/2021 & 0.22 & D1 \\ 8/6/2021 & 0.22 & D2 \\ 11/5/2021 & 0.22 & D3 \\ 2/4/2022 & 0.22 & \\ 5/6/2022 & 0.23 & P \\ 8/5/2022 & 0.23 & \end{tabular} The actual market price at year end of 2022 was $129.93. Using the constant growth model assuming g=6.5%, try to find ' r ' that leads us to the stock value that is closest to the market price of $129.93. You can use either Excel or manual calculation. Provide your answer in % in the nearest tenth (for example, 0.1392 = 13.9\%). 6 points Holding everything else the same, what is the effect of decreasing ' g ' on the value of stock? decreases stock value. increases stock value. no effect. 6 points Assuming the expected growth rate of 6% but using a different discount rate r=8.5%, what is the value of stock for APPL assuming constant growth? Answer in the nearest tenth. Type your answer... 6 points Holding everthing else the same, what is the effect of increasing ' r ' on value of stock? decreases stock value. increases stock value. no effect. Holding everthing else the same, what is the effect of increasing ' r ' on value of stock? decreases stock value. increases stock value. no effect. 6 points Now, let's try to price APPL using the two-stage growth model. We will assume that APPL expects to go through a rapid expansion and fast growth over the next two years. Assume that g1=30%,g2=3%, and r=5% and that APPL's dividends enter the second stage of growth after two years (that is, D1 and D2 grow at the rate of g1, and dividends from D3 grows at the new lower rate of g2). What is the value of stock for APPL assuming two stage growth model? Please answer in the nearest tenth. Type your answer... 6 points What happens to the stock value when g is greater than r ? Try g=6% and r=5%. Stock value turns negative, so assuming g>r is an invalid assumption. Stock value is still positive, so assuming g > r is a valid assumption. Stock value turns negative, but whatever
