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A companys earnings are expected to grow at 25% for 2 years. It currently pays a dividend of $1.00 and plans to continue increasing its
A companys earnings are expected to grow at 25% for 2 years. It currently pays a dividend of $1.00 and plans to continue increasing its dividend at the sustainable growth rate of 9.1%. Following the first two years, the company will maintain a 65% retention rate and experience a return on equity of 14%. The required rate of return for the investor is 12.5%. The current value of the stock is:
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