Its required return rs is 985 what is the best estimate of


The XYZ Company paid $1.05 dividend yesterday. Its dividend growth rate is expected to be constant at 21.30% for 2 years, after which dividends are expected to grow at a rate of 5.45% forever. Its required return (rs) is 9.85%. What is the best estimate of the current stock price?

Answer is either:

a) $39.42

b) $32.46

c) $37.76

d) $33.12

e) $24.84

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Financial Management: Its required return rs is 985 what is the best estimate of
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