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A financial analyst following Fast Start Inc., a new high - growth company, estimates that the current risk - free rate is 6 . 2

A financial analyst following Fast Start Inc., a new high-growth company, estimates that the current risk-free rate is 6.25%, the market risk premium is 5%, and that Fast Starts beta is 1.75. Company just paid a dividend of $1.00 per share. The companys dividend is expected to grow at a rate of 25% this year, 20% next year, and 15% the following year. After three years the dividend is expected to grow at a constant rate of 7% a year. The company is expected to maintain its current payout ratio. What is the current stock price?
A) $18.53
B) $19.00
C) $25.00
D) $24.80
E) $23.07

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