Question
The dividend-growth model may be used to value a stock: V = D o (1 + g) k - g A.) What is the value
The dividend-growth model may be used to value a stock:
V = Do (1 + g)
k - g
A.) What is the value of this stock if:
Do = $2
k = 10%
g = 6%
B.) What is the value of this stock if the dividend is increased to $3 and the other variable remain constant?
C.) What is the value of this stock if the required return declines to 7.5% and the other variables remain constant?
D.) What is the value of this stock if the growth rate declines to 4% and the other variables remain constant?
E.) What is the value of this stock if the dividend is increased to $2.30, the growth rate declines to 4%, and the required return remains 10%?
I know this is a lot, but please if you can help me answer questions in detail and show all work. I will rgive the best answer a high rating. Thank you:-)
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