An analyst’s forecast for a company’s dividends for the next three years are:
D1 = $4,700
D2 = $5,100 and
D3 = $5,400
If the analyst uses an Re = 10% and g = 3% for the company, what would be the continuous growth (in dollars) for the company using the dividend approach model?
A. $12,548
B. $59,472
C. $65,419
D. $23,184
A company has a book value of $2 billion, a market cap of $8 billion, its dividend payout percentage is 1.80% and its operating profit is 22.2%.
What amount does this equate to using the Buffett formula?
A. 72
B. 8
C. 6
D. 12.5
