please answer part c and d. Please make sure your answer is correct. The Duo Growth Company just paid a dividend of $1.00 per share. The dividend is expected to grow at a rate of 24% per year for thenext three years and then to level off to 5% per year forever. You think the appropriate market capitalization rate is 19% per year.a. What is your estimate of the intrinsic value of a share of the stock? (Use intermediate calculations rounded to 4 decimal places.Round your answer to 2 decimal places.)Answer is complete and correct.Intrinsic value per share$b. If the market price of a share is equal to this intrinsic value, what is the expected dividend yield? (Use intermediate values roundedto 2 decimal places. Round your answer to 2 decimal places.)Expected dividend yield11.74Answer is complete and correct.10.56 %c. What do you expect its price to be one year from now? (Use intermediate values rounded to 4 decimal places. Round your answerto 2 decimal places.)$Answer is complete but not entirely correct.Expected price25.96 Xd-1. What is the implied capital gain? (Use intermediate values rounded to 2 decimal places. Round your answer to 4 decimalplaces.)X Answer is complete but not entirely correct.

* SOLUTION :- From the above information the calculation is given as below

c. What do you expect its price to be one year from now? (Use intermediate values rounded to 4 decimal places. Round your answer to 2 decimal places.) X Answer is complete but not entirely correct. Expected price $ 25.96 X

c. What do you expect its price to be one year from now? (Use intermediate values rounded to 4 decimal places. Round your answer to 2 decimal places.) X Answer is complete but not entirely correct. Expected price $ 25.96 X

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

please answer part c and d. Please make sure your answer is correct.

The Duo Growth Company just paid a dividend of $1.00 per share. The dividend is expected to grow at a rate of 24% per year for the
next three years and then to level off to 5% per year forever. You think the appropriate market capitalization rate is 19% per year.
a. What is your estimate of the intrinsic value of a share of the stock? (Use intermediate calculations rounded to 4 decimal places.
Round your answer to 2 decimal places.)
Answer is complete and correct.
Intrinsic value per share
$
b. If the market price of a share is equal to this intrinsic value, what is the expected dividend yield? (Use intermediate values rounded
to 2 decimal places. Round your answer to 2 decimal places.)
Expected dividend yield
11.74
Answer is complete and correct.
10.56 %
c. What do you expect its price to be one year from now? (Use intermediate values rounded to 4 decimal places. Round your answer
to 2 decimal places.)
$
Answer is complete but not entirely correct.
Expected price
25.96 X
d-1. What is the implied capital gain? (Use intermediate values rounded to 2 decimal places. Round your answer to 4 decimal
places.)
X Answer is complete but not entirely correct.

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