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Consider a company that pays out all of their free cash flow as a dividend to shareholders. They paid a dividend last year (year 0) of $1.50. Dividends are expected to grow at 5% for the life of the firm (aka forever). The appropriate discount rate is 12%. According to the dividend discount model, what should the share of stock be worth today?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92257216

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