Calculate the terminal value

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Question - Access Fund recently paid a dividend, of $1.45. The company expects to have supernormal growth of 15% for 3 years before the dividend is expected to grow at a constant rate of 6%. The firm's cost of equity is 19%.

a. Calculate the Terminal Value? What does this amount represent?

b. Which cash flows would you discount, and by how many years, to find the current value of the stock?

c. Which cash flows would you discount, and by how many years, to find the expected price of the stock after 1 year?

d. Which cash flows would you discount, and by how many years, to find the expected price of the stock after 2 years?

Reference no: EM133273901

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