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Licemer1 [7]
3 years ago
8

Assume that Bon Temps is expected to experience supernormal growth of 30% for the next 3 years, then to return to its long-run c

onstant growth rate of 6%. What is the stock’s value under these conditions? What are its expected dividend yield and its capital gains yield in Year 1? In Year 4?
Business
1 answer:
svetoff [14.1K]3 years ago
3 0

Answer:

Expected value one year from now=D2/(k-g)

=2.25/(16%-6%)

=22.5

Explanation:

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