1
answer
1
watching
300
views
26 Apr 2021
Question 2
Tresla Corporation is experiencing rapid growth. Dividends are expected to double in each of the next two years, grow at 20% per year over three years after that, and then 5% percent per year indefinitely. The required return on this stock is 15%, and the stock currently sells for $730 per share.
- Tresla just paid the dividend. What was it?
- “Draw” the time line (a table) showing dividends paid by Tresla over the next 7 years.
- What would be the price of Tresla be if it did not grow and continued to pay the same dividends as it had just paid.
- What is the present value of Tresla’s growth opportunities (PVGO)?
Question 2
Tresla Corporation is experiencing rapid growth. Dividends are expected to double in each of the next two years, grow at 20% per year over three years after that, and then 5% percent per year indefinitely. The required return on this stock is 15%, and the stock currently sells for $730 per share.
- Tresla just paid the dividend. What was it?
- “Draw” the time line (a table) showing dividends paid by Tresla over the next 7 years.
- What would be the price of Tresla be if it did not grow and continued to pay the same dividends as it had just paid.
- What is the present value of Tresla’s growth opportunities (PVGO)?
Read by 2 people
