Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Duo Growth Company just paid a dividend of $100 per share. The dividend is expected to grow at a rate of 28% per year

image text in transcribed
image text in transcribed
The Duo Growth Company just paid a dividend of $100 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. e. What is your estimate of the intrinsic value of a share of the stock? (Use intermediate calculations rounded to 4 decimal places. Round your answer to 2 decimal places.) Intrinsic value per share b. If the market price of a share is equal to this intrinsic value, what is the expected dividend yield? (Use intermediate values rounded to 2 decimal places. Round your answer to 4 decimal places.) Expected dividend yield c. what do you expect its price to be one year from now? (use intermediate values rounded to 4 decimal places. Round your answer to 2 decimal places) Expected price

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advances In Financial Machine Learning

Authors: Marcos Lopez De Prado

1st Edition

1119482089, 978-1119482086

More Books

Students also viewed these Finance questions