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  3. please help ..... its urgent ..... 4. a. assume

PLEASE HELP ..... ITS URGENT ..... 4. a. Assume a major investment service...

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Finance

PLEASE HELP ..... ITS URGENT .....

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4. a. Assume a major investment service has just given Stonecold Corporation its highest investment rating, along with a strong buy recommendation. This is because Stonecold's stock dividends are expected to grow at the rate of 12% a year for the next 4 years due to high growth rate in earnings and level out at 9% thereafter. Currently, Stonecold Corporation paid its stockholders an annual dividend of $3 a share. Based on your own analysis, the market return is 10% with inflation rate of 6%, Stonecold Corporation's common stock is 80% more volatile than market, and you want to obtain at least 15% return. Calculate the intrinsic value of Stonecold Corporation's common stock. (8 marks)

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