Question
Taussig Technologies Corporation (TTC) has been growing at a rate of 18% per year in recent years. This same growth rate is expected to last
Taussig Technologies Corporation (TTC) has been growing at a rate of 18% per year in recent years. This same growth rate is expected to last for another 2 years, then decline to gn = 5%.
If D0 = $1.60 and rs = 10.00%, what is TTC's stock worth today? Round your answer to the nearest cent. Do not round your intermediate calculations. $ What is its expected dividend yield at this time, that is, during Year 1? Round your answer to two decimal places. Do not round your intermediate calculations. % What is its capital gains yields at this time, that is, during Year 1? Round your answer to two decimal places. Do not round your intermediate calculations. %
What will TTC's dividend and capital gains yields be once its period of supernormal growth ends? (Hint: These values will be the same regardless of whether you examine the case of 2 or 5 years of supernormal growth; the calculations are very easy.) Round your answers to two decimal places. Dividend yield % Capital gains yield %
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