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hart enterprises recently paid a dividend, Do,of$1.25. It expects to have nonconstant growth of 20% for 2yearsfollowed by a constant rate of 5% thereafter. Thefirmsrequired return is 10%.
a) how far away is the terminal or hoizon date?
b) What is the firm's horizon or terminal Value?
c) What is the firm's intrinisc value today, P0?

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Deanna Hettinger
Deanna HettingerLv2
28 Sep 2019

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Related questions

Hart Enterprises recently paid a dividend, D0, of $3.50. It expects to have nonconstant growth of 22% for 2 years followed by a constant rate of 4% thereafter. The firm's required return is 10%.

How far away is the horizon date?

The terminal, or horizon, date is infinity since common stocks do not have a maturity date.

The terminal, or horizon, date is Year 0 since the value of a common stock is the present value of all future expected dividends at time zero.

The terminal, or horizon, date is the date when the growth rate becomes nonconstant. This occurs at time zero.

The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the beginning of Year 2.

The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the end of Year 2.


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

$

What is the firm's intrinsic value today, P0? Round your answer to two decimal places.

Hart Enterprises recently paid a dividend, D0, of $1.50. It expects to have nonconstant growth of 18% for 2 years followed by a constant rate of 4% thereafter. The firm's required return is 15%.

How far away is the horizon date?

The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the end of Year 2.

The terminal, or horizon, date is infinity since common stocks do not have a maturity date.

The terminal, or horizon, date is Year 0 since the value of a common stock is the present value of all future expected dividends at time zero.

The terminal, or horizon, date is the date when the growth rate becomes nonconstant. This occurs at time zero.

The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the beginning of Year 2.

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

What is the firm's intrinsic value today, P0? Round your answer to two decimal places.

Hart Enterprises recently paid a dividend, D0, of $2.50. It expects to have nonconstant growth of 15% for 2 years followed by a constant rate of 8% thereafter. The firm's required return is 19%.

How far away is the horizon date? select one below

a.The terminal, or horizon, date is Year 0 since the value of a common stock is the present value of all future expected dividends at time zero.

b.The terminal, or horizon, date is the date when the growth rate becomes nonconstant. This occurs at time zero.

c.The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the beginning of Year 2.

d.The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the end of Year 2.

e.The terminal, or horizon, date is infinity since common stocks do not have a maturity date.

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

$

What is the firm's intrinsic value today, P0? Round your answer to two decimal places.

$

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