Deployment Specialists pays a current (annual) dividend of $1 and is expected to

Question

Deployment Specialists pays a current (annual) dividend of $1 and is expected to grow at 24% for two years and then at 5% thereafter. If the required return for Deployment Specialists is 9.5%, what is the intrinsic value of Deployment Specialists stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.) (not 27.5)

Deployment Specialists pays a current (annual) dividend of $1 and is expected to grow at 24% for two years and then at 5% thereafter. If the required return for Deployment Specialists is 9.5%, what is the intrinsic value of Deployment Specialists stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.) (not 27.5)

Explanation / Answer

Year dividend 0 1 1 1.24 2 1.5376 3 1.61448 Ke 9.50% growth rate 5% Value of a share expected dividend/ Ke- g 16.94453

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