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You looked up publicly available financial data on Target. The latest dividend paid was $2.64 per share. It is expected to gr
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Answer #1
Year 0 1 2
Dividend 2.64 2.9568 3.25248
TV 111.67
Present Value 2.64 2.789434 102.2792453
Price 107.7087
  • Terminal Value (TV)= [D2*(1+3%)]/(6%-3%)
  • Price=Summation of Present value(PV) of Dividends
  • The stock is overvalued as the intrinsic price is less than the price of the stock in the market.
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