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The Horton Company's last dividend was $1.40 (Do). Its dividend growth rate is expected to be constant at 20% for 2 years, after which dividends
The Horton Company's last dividend was $1.40 (Do). Its dividend growth rate is expected to be constant at 20% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its required return (rs) is 10%.
- Find horizon value. Briefly explain how you got the answer.
- What is the best estimate of the current stock price? Explain your logic.
- If the market price of Horton Co is $27.00 per share is the stock over- or undervalued? Why do you think so?
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