Day-Brite, Inc expects to pay $1.45 dividend for 2018, $1.56…
Day-Brite, Inc expects to pay $1.45 dividend for 2018, $1.56 dividend for 2019 and a $1.75 dividend for 2020 for Day-Brite Corporation. For all years after 2020, Day-Brite will pay a $2.05 dividend. Using the dividend discount valuation model determine the intrinsic value per share of Day-Brite Corporation, assuming the company’s cost of equity capital is 4%. 2. If the current market price per share is $22.50, what action would you take and why?