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A company has just paid a $2 per share dividend. The dividends are expected to grow by 24% a year for 8 years. The growth

A company has just paid a $2 per share dividend. The dividends are expected to grow by 24% a year for 8 years. The growth rate in dividends thereafter is expected to stabilize at 4% a year. The appropriate annual discount rate for the companys stock is 12%.

a. What is the companys current equilibrium stock price?

b. What is the companys expected stock price in 20 years?

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