Holt Enterprises recently paid a dividend, D_{0}, of $2.25. It expects to have nonconstant growth of 13% for 2 years followed by a constant rate of 7% thereafter. The firm’s required return is 10%.

- How far away is the horizon date?
- The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the end of Year 2.
- The terminal, or horizon, date is infinity since common stocks do not have a maturity date.
- The terminal, or horizon, date is Year 0 since the value of a common stock is the present value of all future expected dividends at time zero.
- The terminal, or horizon, date is the date when the growth rate becomes nonconstant. This occurs at time zero.
- The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the beginning of Year 2.

-Select-IIIIIIIVVItem 1

- What is the firm’s horizon, or continuing, value? Round your answer to two decimal places. Do not round your intermediate calculations.
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- What is the firm’s intrinsic value today,
*P̂*_{0}? Round your answer to two decimal places. Do not round your intermediate calculations. Get Finance homework help today