Stock's current intrinsic value
Not what you're looking for?
WWW Servers just paid a dividend of D0 = $1.00. Analysts expect the company's dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The required return on WWW's stock is 9.00%. What is the best estimate of the stock's current intrinsic value?
A. $31.50
B. $32.31
C. $33.14
D. $33.99
E. $34.84
Purchase this Solution
Solution Summary
Response helps in estimating the stock's current intrinsic value
Solution Preview
Dividend
Year Dividend
1 1.3 (30% growth )
2 1.43 (10% growth)
3 1.50 (5% growth)
From year 3 onwards, the dividends would be growing ...
Purchase this Solution
Free BrainMass Quizzes
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Introduction to Finance
This quiz test introductory finance topics.
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.