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Hoit Enterprlses recently paid a dividend, Do, of 51,50 . It expects to have noncenstant growth
of 22% for 2 years followed by a constant rate of 10%4 thereafter. The firm's required return is
12% a. How for away is the horizon date? 1. The terminal, or horizon, date is the date when the
growth rate becomes constant. This occurs at the end of Year 2. II. The terminal, or horizon, dote
is infinity since common stocks do not have a maturity date. III. The terminal, or horizon, date is
Year 0 since the value of a common stock is the present value of all future expocted dividends at
time zero. I. The terminal, or horizon, date is the date when the growth rate becomes
nonconstant. This ocours at time rero. V. The terminai, or horizon, date is the date when the
growth rate becomes constant. This accurs at the begining of Year z. b. What is the firm's
horizon, or continuing, value? Do not round intermediate calculations. Round your ansaer to the
nearest cent. 7 c. What is the firm's intrinsic value today, P^0 ? Do not round intermedate
calculations. Round your answer to the nearest cent. 4

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Hoit Enterprlses recently paid a dividend, Do, of 51,50 . It expects .pdf

  • 1. Hoit Enterprlses recently paid a dividend, Do, of 51,50 . It expects to have noncenstant growth of 22% for 2 years followed by a constant rate of 10%4 thereafter. The firm's required return is 12% a. How for away is the horizon date? 1. The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the end of Year 2. II. The terminal, or horizon, dote is infinity since common stocks do not have a maturity date. III. The terminal, or horizon, date is Year 0 since the value of a common stock is the present value of all future expocted dividends at time zero. I. The terminal, or horizon, date is the date when the growth rate becomes nonconstant. This ocours at time rero. V. The terminai, or horizon, date is the date when the growth rate becomes constant. This accurs at the begining of Year z. b. What is the firm's horizon, or continuing, value? Do not round intermediate calculations. Round your ansaer to the nearest cent. 7 c. What is the firm's intrinsic value today, P^0 ? Do not round intermedate calculations. Round your answer to the nearest cent. 4