Question
In: Finance
The Duo Growth Company just paid a dividend of $1.00 per share. The dividend is expected...
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.)
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.)
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.)
d-1. What is the implied capital gain? (Do not round intermediate calculations. Round your final answer to 1 decimal place.)
Solutions
jeff jeffy answered 1 year agoRelated Solutions
The Duo Growth Company just paid a dividend of $1.00 per share. The dividend is expected...
The Duo Growth Company just paid a dividend of $1.00 per share.
The dividend is expected to grow at a rate of 23% 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 18% per
year.
a. What is your estimate of the intrinsic value
of a share of the stock? (Use intermediate calculations
rounded to 4 decimal places. Round your answer to 2 decimal...
The Duo Growth Company just paid a dividend of $1.00 per share. The dividend is expected...
The Duo Growth Company just paid a dividend of $1.00 per share.
The dividend is expected to grow at a rate of 21% 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 16% per
year.
a. What is your estimate of the intrinsic value
of a share of the stock?
b. b. If the market price of a share is equal
to this intrinsic...
The Duo Growth Company just paid a dividend of $1 per share. The dividend is expected...
The Duo Growth Company just paid a dividend of $1 per share. The
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while the expected rate of return of the whole market is 12%.
a) What is the required rate of return on the Duo Growth
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The Duo Growth Company just paid a dividend of $1.2 per share. The dividend is expected...
The Duo Growth Company just paid a dividend of $1.2 per share.
The dividend is expected to grow at a rate of 24% per year for the
next 3 years and then to level off to 6% per year forever. You
think the appropriate market capitalization rate is 21% per
year.
a. What is your estimate of the intrinsic value of a share of
the stock?
b. If the market price of a share is equal to this intrinsic
value,...
The Duo Growth Company just paid a dividend of $1 per share. The dividend is expected...
The Duo Growth Company just paid a dividend of $1 per share. The
dividend is expected to grow at a rate of 25% per year for the next
three years and then level off to 5% per year forever. You think
the appropriate market capitalization rate is 20% per year.
a. What is your estimate of the intrinsic value of a share of
stock?
b. If the market price of a share is equal to the intrinsic
value, what is...
Problem 1. The Duo Growth Company just paid a dividend of $1 per share. The dividend...
Problem 1. The Duo Growth Company just paid a
dividend of $1 per share. The dividend is expected to grow at a
rate of 25% for the next 3 years and then level off to 5% per year
forever. You think the appropriate market capitalization rate is
20% per year. (3 pts.)
What is your estimate of the intrinsic value of a share of
stock?
If the market price of a share is equal to this intrinsic value,
what is...
Problem 1. The Duo Growth Company just paid a dividend of $1 per share. The dividend...
Problem 1. The Duo Growth Company just paid a
dividend of $1 per share. The dividend is expected to grow at a
rate of 25% for the next 3 years and then level off to 5% per year
forever. You think the appropriate market capitalization rate is
20% per year. (3 pts.)
What is your estimate of the intrinsic value of a share of
stock?
If the market price of a share is equal to this intrinsic value,
what is...
A company just paid a $2 dividend per share. The dividend growth rate is expected to...
A company just paid a $2 dividend per share. The dividend growth
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ABZ Corp. just paid a dividend of $1.00 per share. The dividend is expected to grow...
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Draw the Security Market Line and plot the stock on...
Assume that a company just paid a dividend of $2 per share. The expected growth rate...
Assume that a company just paid a dividend of $2 per share. The
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the stock to you today?
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