If the required rate of return discount rate on 3fbs stock


Three Floyds Brewery (3FB) is planning to pay its first dividend of $2.70/share one year from now. For the fol- lowing four years, the dividend is projected to increase by 10%/year; thereafter, it will grow at a constant rate of 4%, forever. If the required rate of return (discount rate) on 3FB’s stock is 15%, what should be the price of the stock today?

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Financial Management: If the required rate of return discount rate on 3fbs stock
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