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Nonconstant Dividend Growth Valuation A company currently pays a dividend of $3.4 per share (D 0 = $3.4). It is estimated that the company's dividend
Nonconstant Dividend Growth Valuation
A company currently pays a dividend of $3.4 per share (D0 = $3.4). It is estimated that the company's dividend will grow at a rate of 22% per year for the next 2 years, and then at a constant rate of 5% thereafter. The company's stock has a beta of 1.4, the risk-free rate is 9.5%, and the market risk premium is 4.5%. What is your estimate of the stock's current price?
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