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*I will give thumbs up if answered* Please explain where the 1/(1+01)^3 comes from in this constant-growth DCF formula. It doesn't indicate anywhere in the
*I will give thumbs up if answered*
Please explain where the 1/(1+01)^3 comes from in this constant-growth DCF formula. It doesn't indicate anywhere in the question or formula and I'm very confused
DCF Models With Two or More Stages of Growth 3 Example Phoenix produces dividends in 3 consecutive years of 0.00 , 0.31 , and 0.65 , respectively. The dividend in Year 4 is estimated to be 0.67 and should grow in perpetuity at 4%. Given a discount rate of 10%, what is the price of the stock? PV=(1+0.1)1$0.00+(1+0.1)20.31+(1+0.1)30.65+[(1+0.1)31(0.100.04)$0.67]=$9.13Step by Step Solution
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