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Company current equilibrium stock price

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Reference no: EM133121707

A company has just paid a $2 per share dividend. The dividends are expected to grow by 23% a year for 9 years. The growth rate in dividends thereafter is expected to stabilize at 4% a year. The appropriate annual discount rate for the company's stock is 12%.

a. What is the company's current equilibrium stock price?

b. What is the company's expected stock price in 20 years?

Reference no: EM133121707

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