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An analyst feels that Ruth Inc.s earnings and dividends will grow at 16% for three years, after which growth will fall to a constant rate
An analyst feels that Ruth Inc.s earnings and dividends will grow at 16% for three years, after which growth will fall to a constant rate of 7%. If cost of equity is 11%, and Ruths most recently paid dividend was $3.5. What is the value of Ruths stock using the multistage growth model?
A. | $108 | |
B. | $104 | |
C. | $118 | |
D. | $95 |
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