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If ABC earned $8 per share with a retention or plowback ratio of 90%. Its initial growth rate is 30% and is expected to
If ABC earned $8 per share with a retention or plowback ratio of 90%. Its initial growth rate is 30% and is expected to decline on a linear fashion until 10 years later when its growth will become constant at 5% from then on. The required return of the stock is 12%. What is the approximate value for ABC stock based on the H Model?
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To calculate the approximate value of ABC stock based on the H Model we need to consider the dividend growth rate and the required return The H Model ...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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