Business
Business, 11.09.2019 23:10, HavenShort3075

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 3 years and then to 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 the stock? (b) if the market price of a share is equal to this intrinsic value, what is the expected dividend yield? (c) what do you expect its price to be 1 year from now? is the implied capital gain consistent with your estimate of the dividend yield and the market capitalization rate? explain.

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