West Tool Company is expectedto pay a dividend of $1.0 in Year1 and $1.3 in Year 2. Analystsexpect the price of West ToolCompany shares to be $18 twoyears from now. What is theintrinsic value of West ToolCompany stock if the marketcapitalization rate of thecompany is 12% ? Round youranswer to two decimal placesand enter without the dollar sign.

Dividend in year 1 = $1.0Dividend in year 2 = $1.3Capitalization rate = 12%Share price two years…

Answered: West Tool Company is expected to pay a…

West Tool Company is expected to pay a dividend of $1.0 in Year 1 and $1.3 in Year 2. Analysts expect the price of West Tool

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 2P

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