Estimate of the stocks current price

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Reference no: EM13851950

A company currently pays a dividend of $2 per share (D=$2). It is estimated that the company’s dividend will grow at a rate of 20% per year for t the next 2 years, then at a constant rate of 7% thereafter. The company’s stock has a beta of 1.2, the risk-free rate is 7.5, and the market risk premium is 4%. What is your estimate of the stock’s current price?

Reference no: EM13851950

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