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Tattletale News Corp. has been growing at a rate of 20 percent per year, and you expect this growth rate in earnings and dividends to
Tattletale News Corp. has been growing at a rate of 20 percent per year, and you expect this growth rate in earnings and dividends to continue for another 3 years. The last dividend paid was $2. (a) What are the expected values of DIV1,DIV2, and DIV3 ? (b) If the discount rate is 15 percent and the steady growth rate after 3 years is 4 percent, what should the stock price be three years from now and what is the stock price today? 3 (c) Find the dividend yield, DIV1/P0. (d) What will next year's stock price, P1, be? (e) What is the expected rate of return to an investor who buys the stock now and sells it in one year
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