Estimating Intrinsic Share Value Using Dividend Discount Model Mattel, Inc. is expected to pay a $1.44 dividend per share annually. Estimate its intrinsic value per common share using the dividend discount model (DDM) under each of the following separate assumptions. (Assume that Mattel’s cost of equity capital is 8.0%.) Required a. The $1.44 dividend per share occurs at the end of each of the next three years, after which there are no additional dividend payments. Round answer to two decimal places. $Answer b. The $1.44 dividend per share occurs at the end of each year in perpetuity. Round answers to two decimal places, if applicable. $Answer c. The $1.44 dividend per share occurs at the end of each of the next three years, after which the dividends increase at a rate of 4% per year. Round answers to two decimal places. $Answer

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Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.