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etter Mousetraps has come out with an improved product, and the world is beating a path to its door. As a result, the firm projects
etter Mousetraps has come out with an improved product, and the world is beating a path to its door. As a result, the firm projects growth of per year for four years. By then, other firms will have copycat technology, competition will drive down profit margins, and the sustainable growth rate will fall to The most recent annual dividend was DIV $ per share. LO
a What are the expected values of i DIVii DIViii DIV and iv DIV
b What is the expected stock price four years from now? The discount rate is
c What is the stock price today?
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