Ch 09: Assignment - Stocks and Their Valuation 3. Ronconscan grown SOCK As companies evolve, certain factors can drive sudden growth. This may lead to a period of nonconstant, or variable, growth. This would cause the expected growth rate to increase or decrease, thereby affecting the valuation model. For companies in such situations, you would refer to the variable, or nonconstant, growth model for the valuation of the comptny's stock. Consider the case of Portman Industries: Portman Industries just paid a dividend of $1.44 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 16.00% over the next year. After the next year, though, Portman's dividend is expected to grow at a constant rate of 3.20% per year. Assuming that the market is in equilibrium, use the information just given to complete the table. Term Value Dividends one year from now (0) Horizon value Intrinsic value of Portman's stock The risk tree rate() is 4.00%, the market risk premium (RP) 4.80%, and Portman's beta is 1.30 What is the expected dividend vield for Portman's stock today? 80 COD II 000 Ft FO PIL 12 2 15 F als As companies evolve, certain factors can drive sudden growth. This may lead to a period of nonconstant, or variable, growth. This would cause the expected growth rate to increase or decrease, thereby affecting the valuation model. For companies in such situations, you would refer to the variable, or nonconstant, growth model for the valuation of the company's stock. Consider the case of Portman Industries: Portman Industries just paid a dividend of $1.44 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 16.00% over the next year. After the next year, though, Portman's dividend is expected to grow at a constant rate of 3.20% per year. Assuming that the market is in equilibrium, use the information Just given to complete the table 5 Term Value FREE 7- limited ted Dividends one year from now (D3 Horizon vain C Intrinsic value of Portman's stock 51.78 52.00 The risk-free rate (ter) is 4.00%, the $1.72 premium (RP) 4.80%, and Portman's beta is 1.30 What is the expected vidend yield for $1.67 stock today? 7.00 30 FS Il 7 4) 4) FE 11 # 3 $ 4 % 5 2 & 7 6 8 9 9 II 0 Il + delete w W E R T Y U I O S D F G H J x Ch 09: Assignment - Stocks and Their Valuation As companies evolve, certain factors can drive sudden growth. This may lead to a period of nonconstant, or variable, growth. This would cause the expected growth rate to increase or decrease, thereby affecting the valuation model. For companies in such situations, you would refer to the variable, or nonconstant, growth model for the valuation of the company's stock Consider the case of Portman Industries: Portman Industries just paid a dividend of $1.44 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 16.00% over the next year. After the next year, though, Portman's dividend is expected to grow at a constant rate of 3.20% per year. Assuming that the market is in equilibrium, use the information just given to complete the table. Value sed Term Dividends one year from now (D) Horsion value (P) Intrinsic value of Portman's stock $53.75 The risk tree rate (n) i 4.00%, the $23.72 premium (RP) is 4.80%, and Portman's beta is 1.30 $16.00 What is the expected dividend yield for stock today? $24.43 7.54 7.06% Ch 09: Assignment - Stocks and Their Valuation As companies evolve, certain factors can drive sudden growth. This may lead to a period of nonconstant, or variable, growth. This would cause the expected growth rate to increase or decrease, thereby affecting the valuation model. For companies in such situations, you would refer to the variable, or nonconstant, growth model for the valuation of the company's stock ols A Consider the case of Portman Industries: Portman Industries just paid a dividend of $1.44 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 16,00% over the next year. After the next year, though, Portman's dividend is expected to grow at a constant rate of 3.20% per year. Assuming that the market is in equilibrium, use the information just given to complete the table. Value FREE 7 unlimited ited Term Dividends one year from now (0) Horizon value Intrinsic value of Portman's stock 526 The risk-free rate (ru) is 4.00%, them premium (RPM) is 4.80%, and Portman's beta is 1.30 523.67 What is the expected dividend veld for stock today? $28.40 522.16 07.06 GB
