- Write a brief overview concerning stock valuation. Your overview should include:
- A brief explanation of the legal rights and privileges of common stockholders.
- Identification of a formula that applies to the valuation of all stocks.
- An explanation of what constitutes a “constant growth stock” and how it is valued.
- Complete the following stock value calculations:
- Assume that XYZ is a
**constant growth company**whose last dividend was $2.00 with the dividend expected to**grow at 6% indefinitely**. Calculate the following: - The expected dividends for the next three years
- The current stock price
- The expected value in one year
- The dividend yield, capital gains yield, and total return during the first year

- Assume that XYZ is a
- Now assume that XYZ is
**expected to grow 30%**for the next three years and then**grow indefinitely at 6%**. Calculate the following:- The current stock price
- The dividend yield and capital gains yield in the first year

- Now assume that XYZ is a
**constant negative growth**company whose last dividend was $2.00 with the dividend**expected to grow at -6% indefinitely**. Calculate the stock price. - Wrap up your analysis by explaining why investors would be willing to purchase the stock.