Problema stock currently pays a dividend of 390 per share, Ask an Expert

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Problem:

A stock currently pays a dividend of $3.90 per share (D0 = $3.90). It is estimated that the company's dividend will grow at a rate of 22.5% per year for the next 2 years, then at a constant rate of 6.60% thereafter. The company's stock has a beta of 1.70, the risk-free rate is 8.25%, and the market risk premium is 10.50%.

Question: What is your estimate of the stock's current price? Please explain in detail and show your work.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91145740

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