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Calculate the value of xyz stock today

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XYZ stock is expected to pay a dividend of $3.25 for the next 5 years. After that, the dividend will increase to $3.75 and continue indefinitely. XYZ's cost of equity capital is 7%. Using the Dividend Discount Model, please calculate the value of XYZ stock today. If the cost of equity capital increases to 8% after 5 years, how does that affect the price?

Reference no: EM132506138

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