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(1) Calculate the fair value based on the following information: Current dividend = $1.50 Normal growth rate = 4% Super growth rate = 18% Duration

(1) Calculate the fair value based on the following information:

Current dividend = $1.50

Normal growth rate = 4%

Super growth rate = 18%

Duration of the super growth rate = 10 years

Required return 11%

(2) Use the FED Model for calculating the price with the following.

EPS of $6.50; bond yield of 3.5% (AA quality); growth in earnings of 3%.

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