Taussig Technologies Corporation (TTC) has been growing at a rate of 12 per year in recent years This same growth rate is expected to last for another 2 years, then decline to g n 5 Now assume that TTC's period of supernormal growth is to last for 5 years rather than 2 years How would this affect the price, dividend yield, and capital gains yield Due to the longer period of supernormal growth, the value of the stock will be higher for each year The total return as well as the distribution between dividend yield and capital gains yield will remain the same for the duration of the supernormal growth period Due to the longer period of supernormal growth, the value of the stock will be lower for each year The total return as well as the distribution between dividend yield and capital gains yield will differ for the duration of the supernormal growth period Due to the longer period of supernormal growth, the value of the stock will be higher for each year Although the total return will remain the same, the distribution between dividend yield and capital gains yield will differ for the duration of the supernormal growth period Due to the longer period of supernormal growth, the value of the stock will be lower for each year Although the total return will remain the same, the distribution between dividend yield and capital gains yield will differ for the duration of the supernormal growth period Due to the longer period of supernormal growth, the value of the stock will be higher for each year The total return as well as the distribution between dividend yield and capital gains yield will differ for the duration of the supernormal growth period

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Posted on Sep 21, 2024

Taussig Technologies Corporation (TTC) has been growing at a rate of 12% per year in recent years. This same growth rate is expected to last

Taussig Technologies Corporation (TTC) has been growing at a rate of 12% per year in recent years. This same growth rate is expected to last for another 2 years, then decline to g_n = 5%.

Now assume that TTC's period of supernormal growth is to last for 5 years rather than 2 years. How would this affect the price, dividend yield, and capital gains yield?

Due to the longer period of supernormal growth, the value of the stock will be higher for each year. The total return as well as the distribution between dividend yield and capital gains yield will remain the same for the duration of the supernormal growth period.
Due to the longer period of supernormal growth, the value of the stock will be lower for each year. The total return as well as the distribution between dividend yield and capital gains yield will differ for the duration of the supernormal growth period.
Due to the longer period of supernormal growth, the value of the stock will be higher for each year. Although the total return will remain the same, the distribution between dividend yield and capital gains yield will differ for the duration of the supernormal growth period.
Due to the longer period of supernormal growth, the value of the stock will be lower for each year. Although the total return will remain the same, the distribution between dividend yield and capital gains yield will differ for the duration of the supernormal growth period.
Due to the longer period of supernormal growth, the value of the stock will be higher for each year. The total return as well as the distribution between dividend yield and capital gains yield will differ for the duration of the supernormal growth period.