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A firm just paid $ 0 . 5 0 in dividends, and expects to pay $ 0 . 7 5 , $ 1 . 0

A firm just paid $0.50 in dividends, and expects to pay $0.75,$1.00,$1.25, and $1.50 in dividends before it reaches constant growth of 6% per year thereafter. Assume its beta =1.2, riskfree rate =2%, and market risk premium =7%. a. What is the intrinsic value of this stock? i. $27.76 ii. $28.26 iii. $25.47 iv. $30.84 v. $32.46 b. What is the expected value of this stock next year? i. $33.66 ii. $29.90 iii. $29.43 iv. $30.18 v. $27.37

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