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A leading pharmaceutical company issued stock shares to raise money for their new product development. Its profit growth in the first, second and third years
A leading pharmaceutical company issued stock shares to raise money for their new product development. Its profit growth in the first, second and third years is expected to be respectively 5%, 6% and 7% annually. After that it will grow at a constant rate of 8%. The last dividend paid was Rp1000 per share. Calculate the intrinsic value of the stock if the required rate of return is 10%.
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