Evaluate what is the stock price today

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Problem 1: A common share just paid a dividend of $4.75. Dividends are expected to grow by 15% per year for the next 5 years. After this initial period, dividends will grow by 5% per year. The required rate of return on the stock is 16% compounded annually. What is the stock price today?

a) $71.05

b) $76.46

c) $62.39

d) $66.56

e) None of the above

Reference no: EM132622252

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