Problem:
Portman industries just paid a dividend of $2.40 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 12.00% over the next year. After the next year, though, Portman's dividend is expected to grow at a constant rate of 2.40% per year.
The risk free rate is 3.00%, the market risk premium is 3.60% and pormans beta is 1.90.
Assuming that the market is in equilibrium
Question 1: What are the dividends one year from now________?
Question 2: What is the Horizon Value__________?
Question 3: What is the intrinsic value of Portman's stock_______?
Question 4: What is the expected dividend yield for portmant stock today?
A. 5.95%
B. 7.44%
C. 7.26% 3
D. 7.98%
Explain in detail and provide all calculation and formulas.