Problema company currently pays a dividend of 1 per share, Ask an Expert

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Problem:

A company currently pays a dividend of $1 per share (D0 = $1). It is estimated that the company's dividend will grow at a rate of 25% per year for the next 2 years, then at a constant rate of 6% thereafter. The company's stock has a beta of 1.2, the risk-free rate is 5.5%, and the market risk premium is 4%.

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Question 1: What is your estimate of the stock's current price? Please provide all calculation.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91146180

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