Determine the intrinsic value of Mikayla Corporation

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Question - George forecasts a $1.00 dividend for 2012, $1.10 dividend for 2013 and a $1.20 dividend for 2014 for Mikayla Corporation. For all years after 2014, George forecasts that Mikayla Corporation will pay a $1.30 dividend. Using the dividend discount valuation model, determine the intrinsic value of Mikayla Corporation, assuming the company's cost of equity capital is 8%.

a. $16.25

b. $15.72

c. $18.33

d. $14.57

Reference no: EM132515298

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