Gongjin Corp's dividends are expected to rise at 15% within the first 4 years before growing at a constant rate of 2% constantly year after. The company has just paid dividends with an amount of $1. If the company's required rate of return is 13%, determine the intrinsic value of the stock!

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
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Gongjin Corp's dividends are expected to rise at 15% within the first 4 years before
growing at a constant rate of 2% constantly year after. The company has just paid dividends
with an amount of $1. If the company's required rate of return is 13%, determine the
intrinsic value of the stock!
Transcribed Image Text:Gongjin Corp's dividends are expected to rise at 15% within the first 4 years before growing at a constant rate of 2% constantly year after. The company has just paid dividends with an amount of $1. If the company's required rate of return is 13%, determine the intrinsic value of the stock!
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