Ttc has been growing at a rate of 18 per year in recent


TTC has been growing at a rate of 18% per year in recent years. This same growth rate is expected to last for another 2 years (g1 = g2 = 18%).

a. If D0 = $2.60, rs = 10%, and gn = 5%, what is TTC's stock worth today?

1. What are its expected dividend yield at this time?

2. What is the capital gains yield at this time?

b. Now assume that TTC's period of supernormal growth is to last for 5 years rather than 2 years. How would this affect its price, dividend yield, and capital gains yield?

1. Find the price today.

2. Find the expected dividend yield.

3. Find the expected capital gains yield.

c. What will TTC's dividend yield and capital gains yield be once its period of supernormal growth ends?

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Financial Management: Ttc has been growing at a rate of 18 per year in recent
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