1 answer

Bodie Inc. expects that dividends will grow constantly at 0.06. It is expected to pay a...

Question:

Bodie Inc. expects that dividends will grow constantly at 0.06. It is expected to pay a diviend of $4.3 next year, and the market capitalization rate is 0.10. What is the intrinsic value of the company in four years (t4)? Assume the constant growth DDM. * Round your answer to TWO decimal places.


Answers

Dividend Required return growth rate Price D1/(Ke-g) 4.3/(0.10-0.06) 107.50 P4 PO*(1+g)^4 107.50*(1+0.06)^4 $ 135.72 |

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