Taussig Technologies Corporation $($TTC$)$ has been growing at a rate of $20\%$ per year in recent years. This same growth rate is expected to last for another $2$ years, then decline to gn $=6\%.$

The data has been collected in the Microsoft Excel file below. Download the spreadsheet and perform the required analysis to answer the questions below. Do not round intermediate calculations.a$.$ If $D_0=$$$1\mathrm{.}40$ and $r_s=10\%,$ what is TTC$\text{'}$s stock worth today? Round your answer to the nearest cent.

$

per share

What are its expected dividend, and capital gains yields at this time, that is$,$ during Year $1?$ Round your answers to two decimal places.

Dividend yield:

Capital gains yield:

capital gains yield to two decimal places.

The price will

to $

per share.

The dividend yield will

$|$ to

$\%.$

The capital gains yield will

$]$ to

$\%.$

Round your answers to two decimal places.

Dividend yield:

Capital gains yield:

Nonconstant Growth and Corporate Valuation

Last dividend, D$0$ $$1\mathrm{.}40$

Required rate of return, rs $10\%$

Supernormal growth rate, gs $20\%$

Normal growth rate, gn $6\%$

Period of supernormal growth $2$ years

a$.$ Finding TTC$\text{'}$s stock worth today, its expected dividend, and capital gains yields

Year Dividend Formulas

$1$ #N$/$A

$2$ #N$/$A

Horizon value at the end of year $2$ #N$/$A

Stock price #N$/$A

Dividend yield during year $1$ #N$/$A

Capital gains yield during year $1$ #N$/$A

b$.$ Finding the price, dividend yield, and capital gains yield

Period of supernormal growth $5$ years

Year Dividend

$1$ #N$/$A

$2$ #N$/$A

$3$ #N$/$A

$4$ #N$/$A

$5$ #N$/$A

Horizon value at the end of year $5$ #N$/$A

Stock price #N$/$A

Dividend yield during year $1$ #N$/$A

Capital gains yield during year $1$ #N$/$A

c$.$ Finding TTC$\text{'}$s dividend and capital gains yields once its period of supernormal growth ends

Dividend yield #N$/$A

Capital gains yield #N$/$A

d$.$ Finding the stock value based on the corporate valuation model approach

Year FCF $($in millions$)$

$1$ $$6\mathrm{.}3$

$2$ $$13\mathrm{.}4$

$3$ $$21\mathrm{.}7$

$4$ $$43\mathrm{.}8$

$5$ $$69\mathrm{.}4$

$6$ $$89\mathrm{.}8$

$7$ $$108\mathrm{.}6$

$8$ $$130\mathrm{.}4$

$9$ $$152\mathrm{.}8$

$10$ $$164\mathrm{.}9$

WACC $9\%$

Growth rate after the $10$th year, gn $6\%$

Number of common stock outstanding $20$ millions

Number of preferred stock $0$ millions

Value of nonoperating assets $$0$ millions

Market value of debt $$1,000$ millions

HV of FCF at the end of year $10$ millions #N$/$A

PV of FCF$1-10$ at year $0$ millions #N$/$A

PV of HV at year $0$ millions #N$/$A

Market value of operations millions #N$/$A

Market value of nonoperating assets millions #N$/$A

Total corporate value millions #N$/$A

Less: market value of debt millions #N$/$A

Intrinsic value of common equity millions #N$/$A

Intrinsic value per share #N$/$A