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Depressed Panda Slaughterhouses has just paid an annual dividend of $2.59. Analysts expect this dividend to grow at 19.1% per year until the end of
Depressed Panda Slaughterhouses has just paid an annual dividend of $2.59. Analysts expect this dividend to grow at 19.1% per year until the end of year 18. Thereafter, growth will level off at 5.7% per year in perpetuity. To be explicit on timing cash flows grow by 19.1% until t= 18, the t= 19 cash flow will be 5.7% bigger than that the t=18 cash flow, and then cash flows grow by 5.7% annually in perpetuity. The cost of equity capital for Depressed Panda Slaughterhouses is currently 10.0% per annum. According to the dividend-discount model, which of the following is closest to the value today of a share of Depressed Panda Slaughterhouses? O a $374.07 O b. $389.30 OC. $384.27 O d. $395.46 O e. $304.99 Of. $349.87 O g. $403.18 Oh. $284.67
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