XYZ stock will pay $3.45 in dividends next period. The company expects to have 10% growth for
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Question:
XYZ stock will pay $3.45 in dividends next period. The company expects to have 10% growth for 5 years and have constant growth of 5% until foreseeable future. If cost of equity is 8%, what should be the approximate price of this stock today ?
Please provide your detailed explanation step by step especially calculation of the dividend paid in 2nd period of growth and and PV of that period. Thanks.
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