What is your estimate of the stocks current price


Problem

A company currently pays a dividend of $4 per share (D0 = $4). It is estimated that the company's dividend will grow at a rate of 16% per year for the next 2 years, and then at a constant rate of 6% thereafter. The company's stock has a beta of 1.2, the risk-free rate is 10%, and the market risk premium is 5%. What is your estimate of the stock's current price? Do not round intermediate calculations.

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Financial Accounting: What is your estimate of the stocks current price
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