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Chain Reaction Company pays $3.25 today in dividends. They have a current growth rate of 40% and expect it to be 10% after 4 years.
Chain Reaction Company pays $3.25 today in dividends. They have a current growth rate of 40% and expect it to be 10% after 4 years. Then it is expected to remain 10% forever. If the required rate of return is 12%, what is the price of the stock using a two-stage inconsistent growth model with an assumption of the growth rate linearly decreasing over the first four years using an H model?
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