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What is the answer to question D? Problem 18-17 The Duo Growth Company just paid a dividend of $1.00 per share. The dividend is expected

image text in transcribedimage text in transcribedWhat is the answer to question D?

Problem 18-17 The Duo Growth Company just paid a dividend of $1.00 per share. The dividend is expected to grow at a rate of 22% per year for the next three years and then to level off to 5% per year forever. You think the appropriate market capitalization rate is 17% per year. a. What is your estimate of the intrinsic value of a share of the stock? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Answer is complete and correct. Intrinsic value per share 13.18 EA b. If the market price of a share is equal to this intrinsic value, what is the expected dividend yield? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Answer is complete and correct. Expected dividend yield % 9.26 c. What do you expect its price to be one year from now? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Answer is complete and correct. Expected price $ 14.21 d-1. What is the implied capital gain? (Do not round intermediate calculations. Round your final answer to 1 decimal place.) Answer is complete but not entirely correct. Implied Capital Gain 17.1 % d-2. Is the implied capital gain consistent with your estimate of the dividend yield and the market capitalization rate? Yes No

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