Homework Answers
I am asnwering the second and third question,
2) Ans) Dividend growth model
as per the dividend growht model , the formula for calculating the stock price using dividend growth model = D1/(r-g)
where D1 = dividend in the next period
r = discount rate
g = constant growth rate
3) Ans) Discount Rate
since she is calculating the present value of the 1200 which she is going to receive later next year, she should do discounting, and so the rate used for discounting is discount rate
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