Taussig Technologies Corporation (TTC) has been growing at a rate of 20% per year in recentyears. This same growth rate is expected to last for another 2 years, then decline to gn = 7%.a. If Do = $1.30 and rs = 8%, what is TTC's stock worth today? Do not round intermediatecalculations. Round your answer to the nearest cent.What is its expected dividend yield at this time, that is, during Year 1? Do not roundintermediate calculations. Round your answer to two decimal places.%What is its capital gains yields at this time, that is, during Year 1? Do not round intermediatecalculations. Round your answer to two decimal places.b. Now assume that TTC's period of supernormal growth is to last for 5 years rather than 2years. How would this affect the price, dividend yield, and capital gains yield?I. Due to the longer period of supernormal growth, the value of the stock will be lower foreach year. The total return as well as the distribution between dividend yield and capitalgains yield will differ for the duration of the supernormal growth period.II. Due to the longer period of supernormal growth, the value of the stock will be higher foreach year. Although the total return will remain the same, the distribution betweendividend yield and capital gains yield will differ for the duration of the supernormal growthperiod.III. Due to the longer period of supernormal growth, the value of the stock will be lower foreach year. Although the total return will remain the same, the distribution betweendividend yield and capital gains yield will differ for the duration of the supernormal growthperiod.IV. Due to the longer period of supernormal growth, the value of the stock will be higher foreach year. The total return as well as the distribution between dividend yield and capitalgains yield will differ for the duration of the supernormal growth period.V. Due to the longer period of supernormal growth, the value of the stock will be higher foreach year. The total return as well as the distribution between dividend yield and capitalgains yield will remain the same for the duration of the supernormal growth period.-Select- vc. What will TTC's dividend and capital gains yields be once its period of supernormal growthends? (Hint: These values will be the same regardless of whether you examine the case of 2or 5 years of supernormal growth; the calculations are very easy.) Round your answers totwo decimal places.Dividend yield:%Capital gains yield:

Answered: Taussig Technologies Corporation (TTC)…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

Clinton Corporation is expected to pay a dividend of $3.50 next year and $5.50 the year after that. At this point (end of year 2 beginning of year 3) the growth rate in dividends is expected to be 0.05 into the foreseeable future. The required return on stock's of similar risk is 12%. What is the current price Po? Answer should be to nearest penny: ex: 20.32 Be sure to round correctly 20.326 would be 20.33 Your Answer: Answer
An analyst produces the following series of annual dividend forecasts for company D: Expected dividend (end of) year t+1 = 10 euros; Expected dividend (end of) year t+2 = 20 euros; Expected dividend (end of) year t+3 = 10 euros. The analyst further expects that company D dividend will grow indefinitely at a rate of 2 percent after year t+3. Company D cost of equity equals 10 percent. Under these assumptions, calculate the analysts estimate of company D equity value at the end of year t.
Colgate-Palolive company has just paid an annual dividend of $1.37. Analysts are predicting dividends to grow by S 0.11 per year over the next five years. After then, Colgates earnings are expected to grow 6.4% per year, and its dividend payout rate will remain constant. If Colgates equity cost of capital is 7.4% pear year, what price does the dividend discount model predict Colgate stock should sell for today?
Franklin Corporation is expected to pay a dividend of $1.24 per share at the end of the year (D1 = $1.24). The stock sells for $32.40 per share, and its required rate of return is 7.2%. The dividend is expected to grow at some constant rate, g, forever. What is the equilibrium expected growth rate? (Round your answer to 2 decimal places.) Please work out the problem do not use excel.
Zebra is anew firm in a rapidly growing industry. the company is planning on increasing its annual dividend by 0.15 a year for the next 3 years and then decreasing the growth rate to 0.055 per year. the company just paid its annual dividend in the amount of 0.5 per share. What is the current value of one share of this stock if the required "rate of return is 0.19 what is the price of the stock Next page Previous page Quiz navic 13 12 11 10 2 ... Finish at 11:27 6/28/2 HP Auto Menu
Portman Industries just paid a dividend of $1.92 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 16.00% over the next year. After the next year, though, Portman’s dividend is expected to grow at a constant rate of 3.20% per year. The risk-free rate (rRFrRF) is 4.00%, the market risk premium (RPMRPM) is 4.80%, and Portman’s beta is 2.00. What is the dividents one year from now? What is the Horizon value? What is the Intrinsic value?
According to the dividend discount model, what is the value of a share of Bull DogPretzels stock today if the firm’s cost of equity capital is 9.0%? How is the answer 15.02? What is the fastest way doing by hands?
Orkazana Corporation is experiencing rapid growth. Dividends are expected to grow at 30 percent per year during the next three years, 20 percent over the following year, and then 5 percent per year indefinitely. The required return on this stock is 12 percent, and the stock currently sells for $80 per share. What is the projected dividend for the coming year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Projected dividend
use excel and explain why
Dollar Tree Inc (DLTR) is expected to pay a $1.85 dividend, and it is expected to grow at 9.85% for the next 3 years. After 3 years the dividend is expected to grow at the rate of 5.15% indefinitely. If the required return is 8.15%, what is DLTR's stock value today?
Taussig Technologies Corporation (TTC) has been growing at a rate of 13% per year in recent years. This same growth rate is expected to last for another 2 years, then decline to gn = 7%. a. If D₁ = $2.90 and rs = 13%, what is TTC's stock worth today? Do not round intermediate calculations. Round your answer to the nearest cent. $ What is its expected dividend yield at this time, that is, during Year 1? Do not round intermediate calculations. Round your answer to two decimal places. % What is its capital gains yields at this time, that is, during Year 1? Do not round intermediate calculations. Round your answer to two decimal places. % b. Now assume that TTC's period of supernormal growth is to last for 5 years rather than 2 years. How would this affect the price, dividend yield, and capital gains yield? I. Due to the longer period of supernormal growth, the value of the stock will be higher for each year. Although the total return will remain the same, the distribution between dividend…
may i know the answer??

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS