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Use the information to answer the following questions. ABC Company has been growing at a 10% rate, and it just paid a dividend of $3.00.
Use the information to answer the following questions. ABC Company has been growing at a 10% rate, and it just paid a dividend of $3.00. Due to a new product, ABC expects to achieve a dramatic increase in its short-run growth rate, to 20% annually for the next 2 years. After this time, growth is expected to return to the long-run constant rate of 10%. The company's beta is 2.0, the required return on the market is 11%, and the T-bill rate is 7%. What should be the stock price today??
Select one:
a. $78.26
b. $81.26
c. $77.26
d. $99.36
e. $95.04
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