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Nachman Industries just paid a dividend of D 0 = $ 3 per share. Analysts expect the company's dividend to grow by 3 0 %
Nachman Industries just paid a dividend of D $ per share. Analysts expect the company's dividend to grow by this year, by in Year and at a constant rate of in Year and thereafter. The required return on Nachman's stock is What is the best estimate of the stocks current market value? Note: this is a challenging question, which is similar to examples in the last few lecture slides. The method is the same as the discount free cash flow model for enterprise valuation. You replace the FCF with dividends.
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