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Estimate the value of erratic stock to be

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Reference no: EM132466235

The earnings per share of Erratic Corporation are projected to be as follows:

End of Year    Earnings

1              $1.10

2              $1.15

3              $1.18

4              $1.20

After year 4, earnings are expected to grow at a constant rate of 6% indefinitely. If the required rate of return is 12%, what would you estimate the value of Erratic's stock to be? Round your answer to the nearest dollar.

Reference no: EM132466235

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