Hello, I have this exercise of my Investment class with the answers but I need...
50.1K
Verified Solution
Link Copied!
Question
Finance
Hello, I have this exercise of my Investment class with the answers but I need to know the manual procedure, step by step (not Excel) of how to reach those results. Could you help me? Thank you.
1.6 Q3 As an investor, you have given the following information for MN Company Last dividend The company's expected dividend growth 6% Your expectation about the growth rate for the next 3 years 9% the share price after 3 years (FV:) $30 You required rate of return (RROR) 15% Find the maximum amount that you be willing to pay for the stock. Period Dividend (D) Factor =(1+RROR)" = PV (D) PV (FV) Firm Value now 1.6 1.00 4.316325 $19.73 $24.04 1.744 1.15 1.516522 2 1.90096 1.32 1.437399 3 2.072046 1.52 1.362404 $19.73 Assume the same information above, but you expect the growth rate will be maintained indefinitely growth rate expected by you 9% RROR by you 15% Find the maximum amount that you be willing to pay for the stock. Last dividend 1.6 Share value 29.06667 Verify the formula
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
