Please show Excel formulas.

Post by **answerhappygod** » Sun Jun 05, 2022 9:56 am

: Please Show Excel Formulas 1 (50.28 KiB) Viewed 36 times

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Hamilton Landscaping's dividend growth rate is expected to be 30% in the next year, drop to 15% from Year 1 to Year 2, and drop to a constant 5% for Year 2 and all subsequent years. Hamilton has just paid a dividend of $2.50 and its stock has a required return of 11%. a. What is Hamilton's estimated stock price today? Do $2.50 Ts 11.0% 90,1 30% Short-run g; for Year 1 only. Short-run g; for Year 2 only. 91,2 15% gL 5% Long-run g; for Year 3 and all following years. 30% 15% 5% 5% 0 +3 = Horizon value = P₂: D₂ g Year Dividend PV of dividends and PV of horizon value = Po a. What is Hamilton's estimated stock price for Year 1? P₂ + P₁ (1+rs) + P₁ P₁ 1 = D₂ (1+g) = D3 =rs-gl
b. If you bought the stock at Year 0, what your expected dividend yield and capital gains for the upcoming year? 1. Find the expected dividend yield. Dividend yield = D₁ 1 P₂ Dividend yield= I Dividend yield = 2. Find the expected capital gains yield. Use the estimated price for Year 1, P₁, to find the expected gain. Cap. Gain yield= (P₁-Po) Po 7 Cap. Gain yield= Cap. Gain yield- Alternatively, the capital gains yield can be calculated by simply subtracting the dividend yield from the total expected return. Cap. Gain yield= Expected return Dividend yield Cap. Gain yield= Cap. Gain yield= c. What your expected dividend yield and capital gains for the second year (from Year 1 to Year 2)? Why aren't these the same as for the first year? 1. Find the expected dividend yield. Dividend yield = D₂ / P₁ Dividend yield = 1 Dividend yield = 2. Find the expected capital gains yield. Use the estimated price for Year 2, P₂, to find the expected gain. Cap. Gain yield= (P2-P₁) / P₁ Cap. Gain yield= / Cap. Gain yield= Alternatively, the capital gains yield can be calculated by simply subtracting the dividend yield from the total expected return. Cap. Gain yield= Expected return Dividend yield Cap. Gain yield= Cap. Gain yield=