Cmpany xs stock price is 4738 and it recently paid a 100

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1. Company X's stock price is $47.38, and it recently paid a $1.00 dividend. This dividend is expected to grow by 25% for the next 3 years, and then grow forever at a constant rate, g, and rs = 11%. At what constant rate is the stock expected to grow after Year 3?

2. Melbourne Enterprises recently paid a dividend, D0, of $2.75. It expects to have nonconstant growth of 23% for 2 years followed by a constant rate of 10% thereafter. The firm's required return is 11%.

a. What is the firm's horizon, or terminal, value? Round your answer to two decimal places.

b. What is the firm's intrinsic value today, Po ?

Reference no: EM13616911

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