Calculate the value of the stock today

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Problem - Snyder Computer Chips Inc. is experiencing a period of rapid growth. Earnings and dividends are expected to grow at a rate of 15% during the next 2 years, at 13% in the hird year, and at a constant rate of 6% thereafter. Snyder's last dividend was $1.15, and he required rate of return on the stock is 12%.

Required -

a. Calculate the value of the stock today.

b. Calculate the dividend yield and capital gains yield for Years 1, 2, and 3.

Reference no: EM132734467

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