At what price should the stock sell for today

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Reference no: EM131059103

The Mini-DV Tape Production Company is facing decreased sales due to the continual trend toward the use of flash storage devices to capture videos. Based on the most recent long-term earnings forecasts, it is anticipated that dividends will decline at a rate of 15% annually, forever. The firm just paid a dividend of $5.40 and the required return on the stock is 10%. a) At what price should the stock sell for today? b) At what price should the stock sell for 3 years from today?

Reference no: EM131059103

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