a. Can you apply the constant growth rate DDM to estimate its intrinsic value? Explain.
b. It is expected to pay its first cash dividend $1 per share 5 years from now. It its market capitalization rate is 20% and its dividends are expected to grow by 10% per year, what would you estimate its intrinsic value to be?
c. If its current market price is $100 per share, what would you infer the expected growth rate of its future dividends to be?
a. Yes, we can apply the DDM model even if the company doesn't pay ...
This posting solves the given Constant growth rate DDM problem.