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Nonconstant Growth Valuation A company currently pays a dividend of $1.25 per share (D0 = $1.25). It is estimated that the company's dividend will grow at a rate of 20% per year for the next 2 years, then at a constant rate of 5% thereafter. The company's stock has a beta of 1.6, the risk-free rate is 5.5%, and the market risk premium is 5%. What is your estimate of the stock's current price? Round your answer to the nearest cent.

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Financial Management, Finance

Category:- Financial Management
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