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Assume the following information for ABC shares: - Current Dividend = $6.00 Dividend growth rate for next 4 years = 0% pa Dividend growth rate

Assume the following information for ABC shares: -

Current Dividend = $6.00

Dividend growth rate for next 4 years = 0% pa

Dividend growth rate from year 4 onwards = 2% pa

Required return on ABC shares = 10% pa

Calculate the share price for ABC.

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To calculate the share price of ABC we can use the Dividend Discount Model DDM formula The DDM value... blur-text-image

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