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2) Merck just announced a new cancer therapy approval (by the FDA.) Given this news, their expected growth rate over the next 5 years just
2) Merck just announced a new cancer therapy approval (by the FDA.) Given this news, their expected growth rate over the next 5 years just went up to 15%. Their previous dividend (just paid so you missed it) was $2. Your expectation of their eventual normal growth rate (after the next 5years of superior growth) is 6%. Your required return is 12%. What should you be willing to pay for their stock
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