Calculate the value of the stock one year from today

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Shell is experiencing rapid growth. Earnings and dividends are expected to grow at a rate of 15% during the next 2 years, at 13% the following year, and at a constant rate of 6% during Year 4 and thereafter. Its last dividend was $1.15, and its required rate of return is 12%.

Question a) Calculate the PV of the dividends paid during the supernormal growth period.

Question b) Find the PV of the firm's stock price at the end of Year 3.

Question c) Calculate the value of the stock today.

Question d) Calculate the value of the stock one year from today.

Question e) Calculate the value of the stock two years from today.

Question f) Calculate the dividend and capital gains yields for Years 1, 2, and 3

Reference no: EM132488188

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