Calculate the price of the stock today


Question: XYZ Company has been growing at a 10% rate, & it just paid a dividend of $3. Due to a new product, XYZ expects to achieve a dramatic rise in its short-run growth rate, to 20% yearly for the next two years. After this time, growth is expected to return to the long-run constant rate of 10%. The firm’s cost of capital is 15%. Calculate the price of the company’s stock today?

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Finance Basics: Calculate the price of the stock today
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