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Problem:

Your firm just gave a dividend of $3.50 last week. You are expecting a growth rate of 25%, 20% and 15% in the first three years, and 5% every year thereafter.

Required:

Question: Using a discount rate of 10%, what is fair value of the stock today?

Note: Please show how you came up with the solution.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91162181

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