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Q3. GAP Co. has just paid a dividend of 2,50$/Sh and is expecting to grow its dividends during the next four years at the growth
Q3. GAP Co. has just paid a dividend of 2,50$/Sh and is expecting to grow its dividends during the next four years | ||||
at the growth rates of 2,5% in year 1, 2,3% in year 2, 2,0% in year 3, and 1,7% in year 4 and 1,6% in year 5. | ||||
Thereafter the company is expecting to grow at 1,1% growth rate forever. GAP beta is 1,15 | ||||
The market consensus is that the market rate of return is 13% and the Treasury 20-yr Bond is paying 3% | ||||
Using the twostage DDM, how much the stock should be worth today? | ||||
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