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The University Building Company has fallen on hard times. Its management expects to pay no dividends for the next 3 years. However, the dividend for Year 4 will be $3.50 per share, and the dividend is expected to grow at a rate of 2 percent for Year 5, 4 percent for Year 6, and 5 percent every year thereafter. If the required return for UBC is 20 percent, what is the intrinsic (equilibrium) price of the stock?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91612953

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