Find what is estimate of the stock current price for company

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Problem 1: A company currently pays a dividend of $3 per share (D0 = $3). It is estimated that the company's dividend will grow at a rate of 17% per year for the next 2 years, and then at a constant rate of 7% thereafter. The company's stock has a beta of 1.6, the risk-free rate is 10%, and the market risk premium is 6.5%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent.

Reference no: EM133010702

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