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Question 17 (6 points) Whizz Corp. has recently paid a dividend of $3 per share. You expect that the dividend will be $4
Posted: Tue Jan 18, 2022 1:01 pm
by answerhappygod
- Question 17 6 Points Whizz Corp Has Recently Paid A Dividend Of 3 Per Share You Expect That The Dividend Will Be 4 1 (31.27 KiB) Viewed 44 times
Question 17 (6 points) Whizz Corp. has recently paid a dividend of $3 per share. You expect that the dividend will be $4 next year (t=1), increase 20% the following year (t=2), then grow at a rate of 5% indefinitely (after t=2). The beta of Whizz Corp is 2. You estimate that the risk-free rate is 5%, and the market risk premium is 5% as well. The
company's tax rate is 0%. If your estimations are correct, what is the value of the stock today? (6 marks)