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Your firm expects EPS equal to $4.00 at the end of the year and expects to grow at 35% for two years after that, before
Your firm expects EPS equal to $4.00 at the end of the year and expects to grow at 35% for two years after that, before slowing to a constant growth rate of 8%. If it maintains a payout ratio of 40% and the cost of equity capital is 14%, what does your firm believe should be the fair value of its stock?
Final answer should be $40.46
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