Assignment 3-1, Question 1 | | | | | | | | | |
| | | | | | | | | | | | |
1a. Calculate the
value of the stock today: | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | 1. Calculate the PV of the dividends
paid during the supernatural growth period: | | | | | |
| | | | | | | | | | | | |
| | | $ | | % | | $ | | | | | |
| | D1= | 1.15 | x | 1.15 | = | 1.32 | | | | | |
| | D2= | 1.32 | x | 1.15 | = | 1.52 | | | | | |
| | D3= | 1.52 | x | 1.13 | = | 1.72 | | | | | |
| | | | | | | | | | | | |
| | PV of Dividends = | 1.32 | + | 1.52 | + | 1.72 | = | $3.63 | | |
| | | | 1.12 | | (1.12)^2 | | (1.12)^3 | | | | |
| | | | | | | | | | | | |
| | 2. Find the PV of Turbo’s stock price at the end of
Year 3: | | | | | |
| | | | | | | | | | | | |
| | P3^ = | ____D4____ | = | __ _D3(1+g)______ | | | | | | |
| | | rs-g | | rs-g | | | | | | |
| | | | | | | G=.06% | | | | | |
| | = | 1.72(1.06) | | | RS=.12% | | | | | |
| | | .12-.06 | | | | | | | | |
| | | | | | | | | | | | |
| | = | $30.39 | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | PV of P3^ = | 30.39 | = | $21.71 | | | | | | |
| | | (1.12)^3 | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | 3. Sum the two components to find the value of the
stock today: | | | | | | |
| | | | | | | | | | | | |
| | Value of current stock (P0^)
= | $21.71 | + | $3.63 | = | $25.34 | | Frist year number |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
1b. Calculate P1^ and P2^. | | | | | | | | | |
| | | | | | | | | | | | |
| | P1^ = | 1.52 | + | 1.72 | + | PPP | = | NNN | | Second year number |
| | | 1.12 | | (1.12)^2 | | (1.12)^2 | | | | | |
| | | | | | | | | | | | |
| | P2^ = | GGG | + | PPP | = | UUU | | UUU | | Third Year number |
| | | 1.12 | | 1.12 | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
1c. Calculate the
dividend yields and capital gains yield for Years 1, 2, and 3. | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | Year | Dividend Yield | + | Capital Gains Yield | = | Total Return | |
| | 1 | $1.3225/MMM ≈ ??? | + | ($26.93 – $MMM) / $MMM ≈ ??? | ≈ | 12% | |
| | 2 | $1.5209/NNN ≈ ???? | + | ($28.64 – $NNN) / $NNN ≈ NNN | ≈ | 12% | |
| | 3 | $1.7186/UUU≈ ???? | + | (30.36 – $UUU) / $UUU ≈ ???% | ≈ | 12% | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
"Looking for a Similar Assignment? Order now and Get 10% Discount! Use Code "Newclient"
Related
https://classicassignments.com/wp-content/uploads/2021/01/final-bg.png
0
0
Davie
https://classicassignments.com/wp-content/uploads/2021/01/final-bg.png
Davie2019-06-29 01:07:562019-06-29 01:07:56Assignment 3-1, Question 1 1a.