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Company XYZ expects their earnings and dividends per share to grow 5% each year indefinitely. If the following years dividend is $10 with a market
Company XYZ expects their earnings and dividends per share to grow 5% each year indefinitely. If the following years dividend is $10 with a market cap rate of 8%, whats the current stock price? Company XYZs growth will end after year 3. Year 4 and after, they will pay out all earnings as dividends. Whats the stock price now? Assumption Is next years EPS is $20
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