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You are analyzing the Sugar Land Company (SLC), assume that SLC's required rate of return is 13 percent. Assume that Sugar Land is a constant
You are analyzing the Sugar Land Company (SLC), assume that SLC's required rate of return is 13 percent. Assume that Sugar Land is a constant growth company whose last dividend DO, was $2.0, and whose dividend is expected to grow indefinitely at a 6 percent rate for ever. Answer the following: a. What is the firm's expected dividend stream over the next 3 years? b. What is the firm's current stock price? c. What is the stock's expected value 1 year from now? d. What is the expected dividend yield, the capital gains yield, and the total return during the first year? e. What would the stock price be if its dividends were expected to have zero growth? (Zero growth model, K is the same but g=0)
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