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Please show all detailed work without the use of excel BK Pharm recently paid $2 per share. The company just got a patent for a
Please show all detailed work without the use of excel
BK Pharm recently paid $2 per share. The company just got a patent for a new drug and the patent right expires at the end of 5th year. Financial analysts now estimate that the company will grow at a rate of 25% until the patent right expires and at normal rate of 8% thereafter. The required rate of return on BK stock is 15%. a. Estimate expected dividends for next 5 years. [2.5 marks] b. Estimate the stock price at the end of 5th year. [4 marks] c. Find the value of stock today. [3.5 marks] Hints: You may find similar example in Chapter 7 of the textbook. Please provide detailed answer showing all the calculations Step by Step Solution
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