Determine the fair value of the company stock

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Reference no: EM131085576

A company paid a dividend of $0.40 and dividends are paid once a year. Dividends are expected to grow at 4 percent p.a. for each of the next five years and then to remain constant forever. Assume required rate of return of 7 percent p.a., and that dividends are paid at the end of each year. Determine the fair value of the company stock.

Reference no: EM131085576

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