Intrinsic Value = Expected Dividend next year/(Required return – growth rate)
= 1.19(1+4.80%)/(10.40%-4.80%)
= $22.27
b.Price after one year = 1.19(1+4.8%)^2/(10.40%-4.80%)
= $23.34
c.HPR = (23.34+1.25-22.27)/22.27
= 10.42% approx..
d.HPR = (Selling Price after one year – buying price today + Dividend)/Buying price
= (23.34-21.30+1.25)/21.30
= 15.45%
Plastic Pretzels stock recently paid a dividend of $1.19 per share. The dividend growth rate is...
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