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Assume that a firm just paid a dividend of $4.50; its cost of equity is 9% and WACC is 8.2%. The firms debt-to-equity is 1.5.

Assume that a firm just paid a dividend of $4.50; its cost of equity is 9% and WACC is 8.2%. The firms debt-to-equity is 1.5. Furthermore, you estimate next years growth in dividends to be 5.8%. You want to predict a 10-year valuation model that ends with a long-run growth rate of 3% and uses a linearly declining structure for the growth rate. What is your estimate of the stocks value today? (Hint: not all of these numbers are necessary to calculate the value.)

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