Question: Using the following information, value a stock assuming you will sell the stock in 3 years; then repeat the valuation assuming you will sell the

Using the following information, value a stock assuming you will sell the stock in 3 years; then repeat the valuation assuming you will sell the stock in 5 years time.

The stock is correctly priced at US$40.00, has a required return of 17%, a growth rate of 7%, and has just paid a US$3.74 dividend.

Compare the two valuations.

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