NewTech Incorporated management plans on paying the company's first dividend of $2.00 three years from today (D3 = $2.00) on its' common stock. After year three the dividend is expected to grow at a constant rate of 5% thereafter. As an investor with a required rate of return of 15%, what would you pay for NewTech common stock today?

Stock price today = $13.807

Explanation:

According to the dividend valuation model , the current price of a stock is the present value of the expected future dividends discounted at the required rate of return

This principle can be applied as follows:

The value of cash flow the stock today is the present value of the future cash flow discounted at the required rate of return

Step 1 : Compute the PV in year 3 of future dividend

PV = D× (1+g)/r-g

D- div in year 3, g- growth rate, r-required rate of return

PV in year 3 = 2× (1.05)/0.15-0.05

                   = 21

Step 2: PV in year in year 0

PV = PV in year 3 × (1+r)^(-n)

r-rate of return- 15%, n- number of years- 3

    =  21 × 1.15^(-3)

    =13.80784088

Stock price today = $13.807

b. condominum i think

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

your welcome leave a rate and a < 3