Asked on 13 Jan

Portman Industries just paid a dividend of $3.60 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 20.00% over the next year. After the next year, though, Portman's dividend is expected to grow at a constant rate of 4.00% per year. The risk-free rate is 5.00%, the market risk premium is 6.00%, and Portman's beta is 1.80. Assuming the market is equilibrium, use the information just given to find:



1a.Dividends one year from now (D1)


1b. Horizon Value


1c.Intrinsic value of portman’s stock


2. What is the expected dividend yield for Portman's stock today?

a. 11.80

b. 13.14

c. 9.44

d. 11.35



Answered on 13 Jan

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