Common stock value-Constant growth Use the constant-growth model (Gordon growth model) to find the value of the firm shown in the following table: (Click on the icon located on the top-right corner of the data table below contents into a spreadsheet.) Dividend expected next year Dividend growth rate Required return $1.06 8.6% 13.1% The value of the firm's stock is $ (Round to the nearest cent.)

4. Expected dividends as a basis for stock values The following graph shows the value of a stock’s dividends over time. The stock’s current dividend is $1.00 per share, and dividends are expected to grow at a constant rate of 2.70% per year. The intrinsic value of a stock should equal the sum of the present value (PV) of all of the dividends that a stock is supposed to pay in the future, but many people find it difficult to imagine adding up an infinite number of dividends. Calculate the present value (PV) of the dividend paid today (D₀) and the discounted value of the dividends expected to be paid 10, 20, and 50 years from now (D10, D20, D50D10, D20, D50). Assume that the stock’s required return (rss) is 8.40%. Note: Carry and round the calculations to four decimal places. Time Period Dividend’s Expected Future Value Dividend’s Expected Present Value Now        End of Year 10           End of Year 20           End of Year 50               Using the orange…

6. Constant growth stocks Super Carpeting Inc. just paid a dividend (Do) of $1.92, and its dividend is expected to grow at a constant rate (g) of 2.80% per year. If the required return (rs) on Super's stock is 7.00%, then the intrinsic, or theoretical market, value of Super's shares is Which of the following statements is true about the constant growth model? The constant growth model implies that dividends remain constant from now to a certain terminal year. The constant growth model implies that dividend growth remains constant from now to infinity. Use the constant growth model to calculate the appropriate values to complete the following ● ements about Super Carpeting Inc.: • If Super's stock is in equilibrium, the current expected dividend yield on the stock will be Super's expected stock price one year from today will be per share. • If Super's stock is in equilibrium, the current expected capital gains yield on Super's stock will be per share. per share. per share.

Use the Gordon Growth Model to estimate the cost of the ordinary shares (expressed as a percentage to two decimal places) from the information provided attached.