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Question 3 (18 points) Tom's Tantalizing Offroading Adventures is a travel agency that arranges adventure trips on motorcycles. The company has just paid a $4.00/share
Question 3 (18 points) Tom's Tantalizing Offroading Adventures is a travel agency that arranges adventure trips on motorcycles. The company has just paid a $4.00/share dividend. The dividend is expected to grow at 12% next year, 8% the following year, 6% the following year and then grow for 3% per year thereafter. Your required rate of return is 10%. a. What is your price estimate for this stock? Please show your all of your work to get full credit. a. If the stock is selling in the market for $68, would you buy or sell it? Please explain your answer.
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