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please go over step by step showing the work on paper - Abbott Securities, Ltd. just paid a dividend of $1.80. Abbott Securities projects supernormal
please go over step by step showing the work on paper
- Abbott Securities, Ltd. just paid a dividend of $1.80. Abbott Securities projects supernormal growth at 10% for the next two years. After that growth is expected to slow down to a normal 5% and go on at that rate indefinitely. The dividends will grow accordingly. If similar shares are earning a return of 8%, how much would you pay for a share of Abbott Securities today? a) Set up a diagram showing the cash flows involved. b) Find the present value of this cash flow, which is the price you would pay today Step by Step Solution
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