Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. zapcovid corporation pays an annual dividend of $2

ZAPCOVID Corporation pays an annual dividend of $2.50 per share and is expected to grow...

50.1K

Verified Solution

Question

Finance

ZAPCOVID Corporation pays an annual dividend of $2.50 per share and is expected to grow at the rate of 25%, 20, and 15% for the next three years respectively followed by a constant growth of 7% thereafter. The current risk free rate of return is 3% and the market risk premium is expected to be 6%. The beta for the firm under consideration is 1.5. Based on the above information, what is the intrinsic value of the firms stock?

Please show your work.

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!
Become a Member

Other questions asked by students

Q

Graph the linear equation.y=2CIERUse the graphing tool to graph the linear equation.Click toenlargegraphAB10108-6AYD4-10GGD

Algebra
Q

In a sentence or two describe each of the following terms:. • prefrontal cortex, • premotor cortex, • primary motor cortex, • basal ganglia, •...

Medical Sciences
Q

An air–fuel mixture enters a constant area combustion chamber at a velocity of 100 m/s a...

Mechanical Engineering
Q

KADS, Inc. has spent RM300,000 on research to develop a new computer game. The firm is...

Finance
Q

x Estimate the size of a crowd at an outdoor concert venue that occupies a...

Biology
Q

K The table shows the average weekly wages in dollars for state government employees and...

Statistics
Q

Use Matrices A, B, C, and D to answer questions 10-15 when possible. When not...

Calculus
Q

What is the radical form of the expression 2z y5 O 2x y8 8x12y15 64x32...

Algebra
Q

The Acom Restaurant Group manufactures the bags of frozen French fries used...

Accounting
Q

Drill Problem 12-1(Algo)[LU 12-1(2)] Complete the following without using Table12.1. Note: Round...

Accounting
Q

On October 1, Organic Farming purchases wind turbines for $140,000. the turbines are expected to...

Accounting
Q

Question 6 Which of the following is not a direct cost for the EZ mobility...

Accounting