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A companys currently pays a dividend of $2 per share

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A companys currently pays a dividend of $2 per share. Its estimated that the companys dividend will grow at a rate of 20% per year for the next 2 years, then at a constant rate of 7% thereafter. The companys stock has a beta of 1.2, the risk free rate is 7.5%, and the market risk premium is 4%. What is your estimate of the stocks current price?

 

Paper#34189 | Written in 18-Jul-2015

Price : $22
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