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A firm has just announced that because of a new joint venture, its earnings will likely grow at a rate of 12% for the next
A firm has just announced that because of a new joint venture, its earnings will likely grow at a rate of 12% for the next five years, after which the earnings growth rate will fall back to a long-term growth rate of 6%. Suppose the firm just paid a dividend of $0.35 per share and the dividend growth is expected to be in line with the firms earnings growth, what should be the current share price for the firm if the required return is 15%?
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