Acompany currently pays a dividend of 315 per share d0 , Financial Management

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Acompany currently pays a dividend of 315 per share d0

Nonconstant Growth Valuation

A company currently pays a dividend of $3.15 per share (D0 = $3.15). It is estimated that the company's dividend will grow at a rate of 23.5% per year for the next 2 years, then at a constant rate of 6.45% thereafter. The company's stock has a beta of 1.85, the risk-free rate is 6.00%, and the market risk premium is 9.00%. What is your estimate of the stock's current price?

$26.81

$33.10

$27.35

$24.89

$22.70

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Financial Management: Acompany currently pays a dividend of 315 per share d0

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Financial Management: Acompany currently pays a dividend of 315 per share d0

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