two Managerial Finance homework
show you work and be on time
US welders just issued a dividend of $2.47. Their dividends are forecasted to grow at 20% for the next 3
years and then at a constant rate of 5% after that. The current Price of US Welders stock is $67.
US Welders is twice as sensitive to market returns as the average stocks. Current rates on government
securities are 3% and the market is returning 7%.
What is your current valuation and buy/sell recommendation for US Welders stock?