1] | Year | Expected Dividend | PVIF at 11.4% | PV at 11.4% |
1 | $ - | 0.89767 | $ - | |
2 | $ - | 0.80580 | $ - | |
3 | $ 1.500000 | 0.72334 | $ 1.09 | |
4 | $ 1.617000 | 0.64932 | $ 1.05 | |
5 | $ 1.743126 | 0.58287 | $ 1.02 | |
PV of dividends t1 to t5 | $ 3.15 | |||
Terminal value of dividends = 1.743126*1.0342/(0.114-0.0342) = | $ 22.59 | |||
PV of terminal value = 22.59/1.114^5 = | $ 13.17 | |||
Current intrinsic value | $ 16.32 | |||
2] | Price at t2: | |||
Year | Expected Dividend | PVIF at 12.4% | PV at 12.4% | |
1 | $ - | $ - | ||
2 | $ - | $ - | ||
3 | $ 1.500000 | 0.88968 | $ 1.33 | |
4 | $ 1.617000 | 0.79153 | $ 1.28 | |
5 | $ 1.743126 | 0.70421 | $ 1.23 | |
PV of dividends t1 to t5 | $ 3.84 | |||
Terminal value of dividends = 1.743126*1.0342/(0.124-0.0342) = | $ 20.08 | |||
PV of terminal value = 20.08/1.124^3 = | $ 14.14 | |||
Price at t2: | $ 17.98 | |||
Price at t3: | ||||
Year | Expected Dividend | PVIF at 12.4% | PV at 12.4% | |
1 | $ - | $ - | ||
2 | $ - | $ - | ||
3 | $ 1.500000 | $ - | ||
4 | $ 1.617000 | 0.88968 | $ 1.44 | |
5 | $ 1.743126 | 0.79153 | $ 1.38 | |
PV of dividends t1 to t5 | $ 2.82 | |||
Terminal value of dividends = 1.743126*1.0342/(0.124-0.0342) = | $ 20.08 | |||
PV of terminal value = 20.08/1.124^2 = | $ 15.89 | |||
Price at t3 | $ 18.71 | |||
Dividend yield = 1.50/17.98 = | 8.34% | |||
Capital gains yield = 18.71/17.98 = | 4.06% | |||
Total yield | 12.40% | |||
3] | Is this statement a possible explanation for …...........dividend yet? | |||
No. |
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