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Question: Supernormal Growth Model

GM is expected to grow at 12% in year 1, 11% in years 2 and 3, 8 % in year 4 and then grow at a constant rate of 5% in the years that follow. The required rate of return (Rs) equals 9%. The company will pay a Dividend at the end of year 1 (D1) equal to 2.15. What is the expected price of this stock?

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Category:- Basic Finance
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