Determine what is estimate of the stocks current price

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Point 1: A company currently pays a dividend of $3.6 per share (D0 = $3.6). It is estimated that the company's dividend will grow at a rate of 24% per year for the next 2 years, and then at a constant rate of 7% thereafter. The company's stock has a beta of 1.6, the risk-free rate is 10%, and the market risk premium is 6%.

Problem 1: Determine What is estimate of the stock's current price?

Reference no: EM132479341

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