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Firm X retains 70% of its earnings for future growth and pays the rest to its shareholders in the form of cash dividends. PE ratio
Firm X retains 70% of its earnings for future growth and pays the rest to its shareholders in the form of cash dividends. PE ratio of the company is 12. Apply Dividend Discount Model to estimate X stock's intrinsic value if you are given that the discount rate is 10% and EPS for the next three years are $7.00, $7.20, and $8.00, respectively.
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