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Please show steps and not use Excel 13. Katahdin Snowshoe Expeditions (KSE) had earnings last year of $12 per share and earnings are expected to
Please show steps and not use Excel
13. Katahdin Snowshoe Expeditions (KSE) had earnings last year of $12 per share and earnings are expected to grow at 25% for the first few years. KSE plans to pay a dividend of $4 at the end of Year 5 (they do not expect to pay dividends in years 1-4) after which the growth rate is expected to slow to 12%. After year 5 , the dividend payout ratio and growth rate are expected to remain unchanged. If KSE's equity cost of capital is 18%, what should the price of KSE's stock be today? (round to the nearest cent)Step by Step Solution
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