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Zylon Corporation's stock is selling for $48 a share according to The Wall Street Journal. We've heard a rumor that the firm will make an
Zylon Corporation's stock is selling for $48 a share according to The Wall Street Journal. We've heard a rumor that the firm will make an exciting new product announcement next week. By studying the industry, we've concluded that this new product will support an overall company growth rate of 20% for about two years. After that, we feel growth will slow rapidly and level off at about 6%. The firm currently pays an annual dividend of $2.00, which can be expected to grow with the company. The required return for stocks of Zylon's level of risk is 10%. Is Zylon a good buy at $48? Explain
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