Constant Growth Valuation: Zenith Corporations most recent dividend paid to shareholders was $6.00. This dividend is...
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Constant Growth Valuation: Zenith Corporations most recent dividend paid to shareholders was $6.00. This dividend is expected to grow at a constant rate of 4% per year. The required rate of return on the stock is 7%. What is the intrinsic value of Zenith’s stock?
Homework Answers
intrinsic value=D1/(Required return-Growth rate)
=(6*1.04)/(0.07-0.04)
which is equal to
=$208
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