Nonconstant growth stock
Do= $2.40
Dividend growth rate is 20% for year 1, then after year one is constant at 4.0%
Risk free rate = 5.0%
Market risk premium = 6.0%
Beta= 1.5
Assuming market is in equilibrium
Questions:
What is the dividend one year from now, (D1)?
Horizon Value (P1)?
Intrinsic value of stock?
What is the expected dividend yield for the stock today?