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?

The current dividend (annually) for deployment specialists is $1.

Dividend growth models can be used to calculate the intrinsic value of stock in Deployment Specialists. 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). Based on the figures provided, Deployment Specialists’ stock intrinsic value would be $(0.09-0.24) = $7.92

In order to calculate the intrinsic value, it is assumed that dividends will be reinvested over time at a constant rate. It does not consider any change in this rate nor other factors such as inflation which may affect return. 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 a result, by regularly monitoring trends as well as making the necessary adjustments, it is possible to still make optimum profits in spite of any potential setbacks.