The Duo Growth Company just paid a dividend of $1.00 per share. The dividend is expected to grow at a rate of 28% per year for the next three years and then to level off to 5% per year forever. You think the appropriate market capitalization rate is 23% per year. Required: a. What is your estimate of the intrinsic value of a share of the stock? Note: Use intermediate calculations rounded to 4 decimal places. Round your answer to 2 decimal places. b. If the market price of a share is equal to this intrinsic value, what is the expected dividend yield? Note: Use intermediate values rounded to 2 decimal places. Round your answer to 2 decimal places. c. What do you expect its price to be one year from now? Note: Use intermediate values rounded to 4 decimal places. Round your answer to 2 decimal places. d-1. What is the implied capital gain? Note: Use intermediate values rounded to 2 decimal places. Round your answer to 4 decimal places. d-2. Is the implied capital gain consistent with your estimate of the dividend yield and the market capitalization rate? a Intrinsic value per share b. Expected dividend yield c. Expected price d-1. Implied Capital Gain d-2. Is this consistent with the DDM? S 21.10 10.80% %

The Duo Growth Company just pald a dividend of $1.00 per share. The dividend is expected to grow at a rate of 28% per year for the next three years and then to level off to 5% per year forever. You think the approprlate market capitalization rate is 23% per year. Required: o. What is your estimate of the intrinsic value of a share of the stock? Note: Use intermediate calculations rounded to 4 decimal places. Round your onswer to 2 decimal ploces. b. If the market price of a share is equal to this intrinsic value, what is the expected dividend yield? Note: Use intermediate values rounded to 2 decimal ploces. Round your answer to 2 decimal places. c. What do you expect its price to be one year from now? Note: Use intermediate values rounded to 4 decimal ploces. Round your answer to 2 decimal places. d-1. What is the implied capital gain? Note: Use intermediate values rounded to 2 decimal places. Round your onswer to 4 decimal ploces. d-2. Is the implied capital gain consistent with your estimate of the dividend yicid and the market capitalization rate