Gilmore, Inc., just paid a dividend of $2.35 per share on its stock. The dividends are expected to grow at a constant rate of 4.1 percent per year, indefinitely. If investors require a return of 10.4 percent on this stock, what is the current price? What will the price be in three years? In 15 years?

You see a fast growing company that is estimated to have dividend growth of 20%, 18%, and 16% over each of the next three years (20% in year 1, 18% in year 2, 16% in year 3). The company paid a dividend of $1.28 per share over the past twelve months. Dividends are expected to grow at a constant rate of 3.0% per year beginning in year 4 to perpetuity. The risk-free rate of return is 4% and the market risk premium (expected return on the S&P 500 minus the risk-free rate of return) is 6%. The stock has a beta of 1.25 versus the S&P 500. Calculate the intrinsic value of this stock using the two-stage dividend discount model. Can anyone show their work for this?

Can someone show their work for this?

rev: 09_20_2012

9.32%

9.06%

4.64%

10.01%

9.54%