Deployment Specialists pays a current (annual) dividend of $1 and is expected to grow at 24% for two years and then at 4% thereafter. If the required return for Deployment Specialists is 9.0%, what is the intrinsic value of Deployment Specialists stock?

Deployment specialists pays a current (annual) dividend of $1 and is

The intrinsic value of Deployment Specialists stock can be calculated using the dividend growth model. This formula takes into account the current dividend paid, expected future growth rate, and the required return for investing in the company’s stock. The formula is: Intrinsic Value = Current Dividend/ (Required return – Growth Rate). Therefore, based on these figures given, the intrinsic value of Deployment Specialists stock would be $1/(0.09- 0.24) =$7.92

The intrinsic value calculation assumes that all dividends are reinvested at a fixed rate over time and does not take into account any changes to this rate or other factors which could affect returns such as inflation. Additionally, it also ignores fluctuations in market conditions & investor sentiment which can influence both short & long-term performance levels.

Furthermore, due to its reliance on estimates there may also be discrepancies between expected values & actual results particularly if certain assumptions turn out to be invalid thus resulting in lower returns than anticipated over time.

In conclusion, the intrinsic value ofDeployment Specialists’ stock provides an indication of what investors should expect from their investment under optimal conditions however it is important to remember that numerous external factors can still have an impact on overall results nonetheless. As such by taking steps like regularly monitoring related trends plus making necessary adjustments where appropriate one may still manage to maximize profits regardless of potential setbacks encountered along way