Application for estimating horizon value of business

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Reference no: EM131935963

A common stock will pay a cash dividend of $4 next year. After that the dividends are expected to increase indefinitely at 4% per year. If the discount rate is 14%, what would be the PV of the stream of dividend payments? Explain the formula to your answer and its application for estimating horizon value of business.

Reference no: EM131935963

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