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You expect Fab Corp to pay a dividend of $2.14/share next year (Year 1); $2.24/share in Year 2; $2.35/share in Year 3; and $2.55/share in

  1. You expect Fab Corp to pay a dividend of $2.14/share next year (Year 1); $2.24/share in Year 2; $2.35/share in Year 3; and $2.55/share in Year 4. You also believe the stock will trade in the market at $130/share at the end of Year 4.
    1. Draw a timeline for Fab Corp given your expectations assuming all cash flows occur at the end of each year.
    2. You have estimated Fab Corps Cost of Equity to be 9.1%. Using your timeline, estimate what Fabs stock should be trading at now.

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