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Estimate of the stock current price

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A company currently pays a dividend of $4 per share (D0= $4). It is estimated that the company's dividend will grow at a rate of 10% per year for the next 2 years, and then at a constant rate of 5% thereafter. The company's stock has a beta of 1.6, the risk-free rate is 4% and the market risk premium is 2%. What is your estimate of the stock's current price?

Reference no: EM132577448

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