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Can someone provide a detailed solution to this please? Question 3 Art Shivakumar, an analyst, is examining the stock of General Electric (NYSE: GE) as
Can someone provide a detailed solution to this please?
Question 3 Art Shivakumar, an analyst, is examining the stock of General Electric (NYSE: GE) as of the beginning of 2019. He notices that the consensus forecast by analysts is that the stock will pay a 4 dividend per share in 2020 and a 6 dividend in 2021. Art expects the price of the stock at the end of 2021 to be 125. He has estimated that the required rate of return on the stock is 10 percent. Assume all dividends are paid at the end of the year. Using the dividend discount model, what is the value of GE stock at the end of 2020? A. 108 B. 119 C. 112 D. None of the aboveStep by Step Solution
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