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The earnings of Large Corporations are expected to grow at an annual rate of 14% over the next 5 years and then slow to a
The earnings of Large Corporations are expected to grow at an annual rate of 14% over the next 5 years and then slow to a constant rate of 10% per year. The company currently pays a dividend of $0.36 per share. What is the value of the companys stock to an investor who requires a 16% rate of return? If the stock has a market price of $15, do you buy it?
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