Part II: 35 points Keo Kitchen just paid a dividend of $3.70. Its stock has a...

Question

Question

Part II: 35 points Keo Kitchen just paid a dividend of $3.70. Its stock has a required rate of return, of 11%, and investors

Answer 1

Answer #1

(a) stocks's instrinsic values=(D0*(1+g))/(r-g)=(3.70*(1+9%))/(11%-9%)=201.65

(b) the dividend at year 3=D0*(1+g)^3=3.70*(1+9%)^3=4.79

Answer 2

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