TV切到哪里

问题如下：

Based on Jackson’s estimates and his selected model for DDL, the current share price is closest to:

选项：

A.$7.20. B.$7.72. C.$8.17.

解释：

Solution

B is correct. The share can be valued using a two-stage DDM model with no dividends in the first stage, as follows:

- Calculate the terminal value of the stock using the Gordon growth model

- P0=D1(r−g)$P_0=\frac{D_1}{\left(r-g\right)}$, where D₁ = $0.50, r = 7.25% and g = 2%

- That yields the present value at the start of year 4; the first dividend is expected at the end of year 4, thus D₄ = $0.50 and value is at end the of year 3 (beginning of year 4)

- P3=0.500.0725−0.020=$9.52$P_3=\frac{0.50}{0.0725-0.020}=\$9.52$

- Discount that value for 3 years at 7.25% = $9.52/(1.0725)³ = $7.72

A is incorrect. It discounts the $9.52 value for four periods not three periods: $9.52/(1.0725)⁴ = $7.20

C is incorrect. It discounts the terminal value the correct number of years but continues to use r-g (0.0725 – 0.02 = 0.0525) as the discount rate: $9.52/(1.0525)³ = $8.17