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Estimate the current price or value per share

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A publicly traded firm just paid out a dividend (assume t=0 on the timeline) of $4/share, so this cash has been paid out and is no longer part of the firm's value and stock price. This firm is expected to make dividend payments forever.

Calculate/estimate the current price or value per share of this stock if its equity cost of capital or required return is r=10% per year, and the dividends will increase or grow at a constant annual rate of g=4%/year forever?

Reference no: EM132630825

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