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The Duo Growth Company just paid a dividend of $ 2 per share. The dividend is expected to grow at a rate of 2 0
The Duo Growth Company just paid a dividend of $ per share. The dividend is expected to grow at a rate of per year for the next three years and then to level off to per year forever. You think the appropriate market capitalization rate is per year.
a What is your estimate of the intrinsic value of a share of the stock? Do not round your intermediate calculations. Omit the $ sign in your response. Round your answer to 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? Round your answer to decimal place.
Expected dividend yield
c What do you expect its price to be one year from now? Is the implied capital gain consistent with your estimate of the dividend yield and the market capitalization rate? Do not round your intermediate calculations. Round your answers to decimal places.
Expected price $
Capital gain
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