video 1) p2

Suppose that the firm recentiy paid a dividend D0=$2.20. It expects to have nonconstant growth of gr=10% for 2 years and then a constant rate of gn=6% thereafter. The firm's required retum is r,=9%. According to the problem walk-through video, what is the formula for the terminal, or continuing value, at the end of year 2 ? P2=(1+r1)3D1P2=(1+r1)2D1P2=r2tD3R2=r2rD1 According to the problem walk-through video, what is the formula for the firm's intrinsic value today? P0=(1+r0)2D1+(1+2)2D1+P2P0=(1+b2)2D1+(1+c2)2D1+(1+c1)2D1+(1+c2)2D2P0=(1+r2)2D1+(1+e0)B3+(1+r0)2P1)P0=(1+r1r2ri Now it's time for you to practice what you've learned. Suppose that the firm recently poid a Gividend \$2.20. It expects to have nonconstant growth of 10% for 3 years and then a constant rate of 6% thereanter. The firm's required return is 9%. The firm's horizon, or continuing, value is and its intrinsic value today is