Worth of the stock is the present value of all the cash flows associated with the stock. Dividend is the only cash flow that a stock holder receives against its investment in the stocks. We need to calculate the present values of all the dividend payments.

Dividend Payment $1.10

Growth rate first 3 years 10%

Growth rate first 4 years 3.2%

Required rate of return 12%

Dividend Discount Factor PV Factor

First year Dividend $1.21 0.892857143 $1.08

Second year Dividend $1.33 0.797193878 $1.06

Third year Dividend $1.46 0.711780248 $1.04

Fourth year Dividend $1.61 0.635518078 $1.02

Stock value after fourth year = $18.89 0.635518078 $12.00

Stock Value $16.21 

5 0

3 years ago

How are instrument families created?

Grace [21]

Musical instruments are grouped into families based on how they make sounds. In an orchestra, musicians sit together in these family groupings. But not every instrument fits neatly into a group. For example, the piano has strings that vibrate, and hammers that strike.

Hope I helped ❤️
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5 0

3 years ago