Question 30 2 pts Etling Inc. is expected to pay a $2.50 dividend in one year and a $3 dividend in two years. The d...

Question

Question

business finance

Answer 1

Answer #1

Using DDM Model,

Stock Price = PV(Dividends) + PV(Horizon Value)

Stock Price = 2.50/(1.08) + 3/(1.08)² + 3(1.03)/(0.08 - 0.03)(1.08)²

Stock Price = $57.87

Answer 2

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