A companys common stock is expected to pay 2 in dividends


A company’s common stock is expected to pay $2 in dividends annually over the next four years. At the end of the fourth year, its stock is expected to be valued at $45. If the firm’s cost of equity is 12%, what is its intrinsic value today? What should its stock sell for in 1 year?

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Financial Management: A companys common stock is expected to pay 2 in dividends
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