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The Fastfood Company has been hit hard due to the current economic crisis. The company's analysts predict that earnings (and dividends) will decline at a
The Fastfood Company has been hit hard due to the current economic crisis. The company's analysts predict that earnings (and dividends) will decline at a rate of 4 percent annually forever. Assume that the risk premium for the market portfolio is 5%, the risk-free rate is 2%, the Fastfood beta is 2 and the most recent dividend paid was $2.00. What will be the dividend yield of the Motion Picture Company in two years from now? Assume the market is in equilibrium. (Show all your formula and calculations) PLEASE SHOW WORK ON EXCEL!!!
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