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You expect to hold Transnational Holdings for five years. The current stock price is $40 and the company just paid a dividend of $1.20. The
You expect to hold Transnational Holdings for five years. The current stock price is $40 and the company just paid a dividend of $1.20. The dividend is expected to grow at 5% per year. Current EPS is $2.00 with growth of 10% forecast for the next five years. The companys required return for stock is 12%. Estimate the PV of the stock price and the PV of the dividends using the PV of a stock model. Would this companys stock be a good buy?
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