Question
Everest Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to
Everest Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to grow at a rate of 32% for the next 2 years, 18.00% in year 3 and 4 and after which competition will probably reduce the growth rate in earnings and dividends to constant growth rate of 7.00%. The companys last dividend was $1.60, its beta is 1.75, the market risk premium is 9.85%, and the risk-free rate is 6.00%. What is the current price of the common stock? Answer Choices: 18.80 $19.53 $21.51 $18.08 $21.33 Please show work
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