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P7 15: Common stock value: Variable growth Bach Musics most recent annual dividend was $1.50 per share (D0 = 1.5), and the firms required return
P7 15: Common stock value: Variable growth
Bach Musics most recent annual dividend was $1.50 per share (D0 = 1.5), and the firms required return is 9%. Find the market value of Bachs shares when:
- Dividends are expected to grow at 10% annually for 2 years, followed by a 5% constant annual growth rate in year 3 to infinity.
- Dividends are expected to grow at 10% annually for 2 years, followed by a 0% constant annual growth rate in year 3 to infinity.
- Dividends are expected to grow at 10% annually for 2 years, followed by an 8% constant annual growth rate in year 3 to infinity.
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