Question
Taussig Technologies Corporation (TTC) has been growing at a rate of 25% per year in recent years. This same supernormal growth rate is expected to
Taussig Technologies Corporation (TTC) has been growing at a rate of 25% per year in recent years. This same supernormal growth rate is expected to last for another 2 years (g1=g2=25%). If D0=$2, rs=13%, and long-term growth gL=8%, then what is TTCs stock worth today? If TTCs period of supernormal growth is to last another 5 years rather than 2 years, how would this affect its dividend yield and capital gains yield? Group of answer choices Cannot be determined. 54.11, dividend yield will start off higher and capital gains yield will start off lower. 57.52, dividend yield will start off higher and capital gains yield will start off lower. 54.11, dividend yield will start off lower and capital gains yield will start off higher. 57.52, dividend yield will start off lower and capital gains yield will start off higher.
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