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Mohammad is thinking about purchasing the common stock of Bond Industries, a rapidly growing gun manufacturer. He finds that the firm's most recent (2022) annual
Mohammad is thinking about purchasing the common stock of Bond Industries, a rapidly growing gun manufacturer. He finds that the firm's most recent (2022) annual dividend payment was $7.5 per share. Mohammad estimates that these dividends will increase at a 10% annual rate, g1, over the next 5 years (2023, 2024, 2025, 2026, and 2027) because of the introduction of a new rifle. Beyond 2027, he expects the firm's mature product line to result in a slowing of the dividend growth rate to 7% per year, g2, for the foreseeable future. Mohammad's required return, r, is 12.5%. Find the price of the stock. 9:23AM
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