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Prescott Pharmaceuticals will pay an annual dividend of 50.55 one year from now. Analysts expect this dividend to grow at 14.8% per year thereafter until
Prescott Pharmaceuticals will pay an annual dividend of 50.55 one year from now. Analysts expect this dividend to grow at 14.8% per year thereafter until the end of year 11. After this period, growth will level off at 7.0% per year (that is the t= 12 cash flow will be 7.0% bigger than that the t=11 cash flow). According to the dividend-discount model, what is the value of a Prescott Pharmaceuticals share if the firm's equity cost of capital is 10.0%? a. $31.96 ob $34.21 OC $35.36 O d. 536.94 Oe $33.18
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