Asset Valuation

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Question


A firm just paid a dividend of $2.2. The dividend is expected to grow at a 25% rate for the next 3 years and at a 7% rate thereafter. What is the value of the stock if the required rate of return is 12%?
Answer

a.

$87.60

b.

$80.41

c.

$73.70

d.

$60.03

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A firm just paid a dividend of $2.2. The dividend is expected to grow at a 25% rate for the next 3 years and at a 7% rate thereafter. What is the value of the stock if the required rate of return is 12%? Answers