Student instructions: This worksheet is for problem 12-27 Enter formulas in the blanks where indicated to complete the calculations needed Problem 12-27 The Nonconstant, or Supernormal Dividend Growth Model Flash in the Pan Corporation Given: Dividend growth rates Dividend expected 1 year from now Assumed required rate of return Expected future dividends during the supernormal growth period Present values of dividends during the supernormal growth period Year 1 Total $3.00 15% Year 2 20% Calculations: a. Present value of Dividends during the supernormal growth period: Year 3 30% Year 4 20% Year 5 b. Present value of dividends during the normal growth period (vear 6 and on) 10% Year 6 and on 5% The only difference from the standard Dividend Growth Model (dividend/share price)+growth rate) is that the standard model assumes the same growth rate (constant) If you think it will briefly go up or down, this is how you adjust the model. In this case, we're assuming extra growth lasting 4 years Year 1 growth rate is provided in (B14) After that, multiply the preceding year by that year's expected growth rate in row 13. Use the PV function =-PV(assumed required rate of return (B15) year (from row 13),, expected future divedends (from row 22) [Notice the c

fo caxtelele the inkentuses mosoded Problem 12.27 The konconstant, of Supernermal Drvidend Growth Model Present vatue of Dimidends ouring the aupernomeal prowth period Fipectiog fube ithiserth thing Twe supenoma groth periad Presed vaines of ataksents durma the supnimarma groith period Totai