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Please explain why the answer become that What would be the approximate expected price of a stock when dividends are expected to grow at a
Please explain why the answer become that
What would be the approximate expected price of a stock when dividends are expected to grow at a 25% rate in each of years 2 and 3, and then grow at a constant rate of 5% if the stock's required return is 13% and next year's dividend will be $4.00? Price=$4/1.13+($41.25)/1.132+($41.252)/1.133+[($41.2521.05)/(0.130.05)]/1.133=$68.64Step by Step Solution
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