Sally Johnson, an analyst covering telecom stocks, is attempting to estimate the intrinsic value of Windstream...

Sally Johnson, an analyst covering telecom stocks, is attempting to estimate the intrinsic value of Windstream (WIN) using the dividend discount model. She collects the following relevant data: The most recent annual dividend per share was $2.5 The applicable discount rate is 8.7% Johnson values the stock using a three-stage DDM, assuming growth rates of 11% for years 1-3, then 6.7% for years 4 and 5, and then 4.1% starting in year 6 into perpetuity. Based on Johnson's assumptions, what is the per-share value of WIN stock?

Expert Solution

NO EXCEL FUNCTION IS USED. ALL FORMULAS ARE PROVIDED. PV FACTOR CALCULATION IS ALSO PROVIDED

jeff jeffy answered 9 months ago

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