Fujix Inc. earned $2 per share last year, and the firm has a policy of paying out half of its earnings as dividends. The company's earnings are expected to grow at 20% rate this year, 15% next year, 10% the following year and 5% a year thereafter. Its beta coefficient is 1.2, and the current risk free rate is 9%. Assume that the market portfolio is expected to earn 14% a year. estimate the intrinsic value of Fujix's stock as of now. Also, what is the expected dividend and capital gains yield for the coming year?,Thanks again Rachel. However, the question asks for expected dividend in the coming year. That cannot be $1.60. Also, how did you come up with a P0 of 10 in calculating your capital gains yield?
Paper#5251 | Written in 18-Jul-2015Price : $25