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An analyst predicts that company Bs dividend at the end of year t+1 will equal 10. The analyst further expects that after year t+1 company
An analyst predicts that company Bs dividend at the end of year t+1 will equal 10. The analyst further expects that after year t+1 company Bs dividends will grow indefinitely at a rate of 2 percent. Company Bs cost of equity equals 7 percent. Under these assumptions, find the analysts estimate of company Bs equity value at the end of year t .
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