The last dividend paid by abbot labs was 100 abbots growth, Ask an Expert

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The last dividend paid by Abbot Labs was $1.00. Abbot's growth rate is expected to be a constant 8% for three years, after which the growth rate is expected to be 10%. Investors require a return of 16% on stocks like Abbot. What should the price of Abbot's stock be?

Answer

$15.36
$16.36
$17.00
$17.40
$18.40

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