Dividend growth rate is expected to be 20% per year for the next 3 years and zero

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Dividend growth rate is expected to be 20% per year for the next 3 years and zero percent afterwards. The past dividend is $1 and the besta of the stock is 1. The market risk premium is 8%, and the risk free rate is 2%.

What is the expected price of the stock?

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Investments

ISBN: 9780073530703

9th Edition

Authors: Zvi Bodie, Alex Kane, Alan J. Marcus

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Posted Date: May 25, 2023 03:59 AM

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Dividend growth rate is expected to be 20% per year for the next 3 years and zero

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SOLUTION To calculate the expected price of the stock we can use the dividend discount model which v... View the full answer

Investments

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