Estimate of the stock current price

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A company currently pays a dividend of $2.5 per share (D0 = $2.5). It is estimated that the company's dividend will grow at a rate of 21% per year for the next 2 years, then at a constant rate of 5% thereafter. The company's stock has a beta of 1.7, the risk-free rate is 4.5%, and the market risk premium is 5%. What is your estimate of the stock's current price? Round your answer to the nearest cent.

Reference no: EM132018976

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