Calculate the expected dividends for each of the next 5 years. Calculate the intrinsic value (Po) of the stock

Suppose a company paid $4.70 per share as a dividend on last Friday. The investors expect the dividend to grow at a constant rate of 6%(g) per year,and their required rate of return(Ks) is 14%

a) Calculate the expected dividends for each of the next 5 years

b) Calculate the intrinsic value (Po) of the stock

c) Do the same as in part b above, but suppose the stock's dividend will not grow at all ( g equals to zero)

By OTA: Parool Agarwal, CA (IP)

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Attachment(s):
- 34786-business- dividends.xls

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