What should the stock price be today


Problem

CNBC News Corporation has been growing at a rate of 10% per year, and you expect this growth rate in earnings and dividends to continue for another 3 years. (i) If the last dividend paid was $6, what will the next dividend be? (ii) If the discount rate is 15% and the steady growth rate after 3 years is 4%, what should the stock price be today?

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Financial Accounting: What should the stock price be today
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