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Problem:

A company currently pays a dividend of $3.75 per share (D0 = $3.75). It is estimated that the company's dividend will grow at a rate of 21% per year for the next 2 years, then at a constant rate of 7% thereafter. The company's stock has a beta of 1.05, the risk-free rate is 8%, and the market risk premium is 4%.

Required:

Question 1: What is your estimate of the stock's current price? Explain all workings out and describe comprehensively

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91146873

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