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You expect ABC Industries to increase their current dividend (D(0)) by 20% for the next 3 years due to a strong cash balance and strong
| You expect ABC Industries to increase their current dividend (D(0)) by 20% for the next 3 years due to a strong cash balance and strong expected earnings. | |||||||||||||||||
| The current dividend D(0) is $3.00. If the Beta of ABC Is 1.0, the risk free rate is 2.5% and the market risk premium is 6%. | |||||||||||||||||
| Answer the following assuming that the dividend will increase at a constant rate of 3% in years 4 and beyond. | |||||||||||||||||
| The market price of the stock is $100. | |||||||||||||||||
| 1) What is the expected dividend yield for the stock using D(1) and the market price of the stock? | |||||||||||||||||
| 2) What is the horizon value of the stock? | |||||||||||||||||
| 3) What is the intrinsic value of the stock today? | |||||||||||||||||
| 4) Should you invest in the stock? explain why or why not | |||||||||||||||||
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Who Is Your Competition You Real Estate Wholesaling Questions Answers And Tools To Help Beginners Crush Their Fears And Stop Procrastinating
Authors: Nick Zalonis
1st Edition
1716097193, 978-1716097195
