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Suppose a firm just paid a dividend of 5$ per share. We expect the firm to grow at a rate of 14% for thee years.
Suppose a firm just paid a dividend of 5$ per share. We expect the firm to grow at a rate of 14% for thee years. after which it will grow at 8% forever. the required return is 10% and the current stock price is 100$. 1. What is the intrinsic value (present value) of stock? 2. Should you buy the stock? Why?
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