Testament Tony just paid a dividend of 1.37 and anticipates a short term growth rate of 16%
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Question:
Testament Tony just paid a dividend of 1.37 and anticipates a short term growth rate of 16% for year 1 and for year 2 (dividends 1 and 2).
Assuming that after year 2, Tony's contract with the City of Detroit will give it a constant growth rate of 4%, what is the fair-value of a share if the required return is 13%?
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