Question
Two companies ND Corp and GD Inc next dividend is expected to be $6.00, each. NDs dividend is expected to remain constant forever. GD is
Two companies ND Corp and GD Inc next dividend is expected to be $6.00, each. NDs dividend is expected to remain constant forever. GD is expected to grow at a constant rate of 3.0% every year forever. The required discount rate is 15%. a. Compute both stock prices today. b. Compute the one-year return of ND Corp and GD Inc stocks. Use the price and dividend in year one and compute the rate of return, consider a purchase price as the current stock price. c. Compute both stock prices eleven years from today. d. Compute both stock prices one hundred years from today.
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