A company currently pays a dividend of 35 per share d0 35


A company currently pays a dividend of $3.5 per share (D0 = $3.5). It is estimated that the company's dividend will grow at a rate of 17% per year for the next 2 years, then at a constant rate of 5% thereafter. The company's stock has a beta of 0.8, the risk-free rate is 6%, and the market risk premium is 3%. What is your estimate of the stock's current price?

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Financial Accounting: A company currently pays a dividend of 35 per share d0 35
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