A stock currently pays a dividend of $2.00 per share. Expected dividend growth is 20% for the

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A stock currently pays a dividend of $2.00 per share. Expected dividend growth is 20% for the next three years and then is expected to revert to 7% thereafter indefinitely.

The required rate of return on this stock is 15%. The stock’s current intrinsic value is

a. $6.54

b. $165.63

c. $36.93

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Fundamentals Of Investing

ISBN: 9781292153988

13th Global Edition

Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk

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Question Posted: Apr 04, 2024 03:32 AM

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A stock currently pays a dividend of $2.00 per share. Expected dividend growth is 20% for the

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Fundamentals Of Investing

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