Anticipated capital gain in percentage terms


Company XYZ is expected to grow at 10% annually forever, and its dividend in the next 12 months is expected to be $2.50, and its required rate of return is 17.5%. a. What is its intrinsic value?. b. If the current price is equal to its intrinsic value, what is next year's expected price?. c. Assume you buy the stock now and sell it after receiving the $2.50 dividend one year from now. What would be your anticipated capital gain in percentage terms? . What is the dividend yield and the holding period return?

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Finance Basics: Anticipated capital gain in percentage terms
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