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How much should the shares be worth today

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Problem - Ace Frisbee Corporation is expected to paya dividend in Year 1 of $3.00, a dividend in Year 2 of $4.00, and a dividend in Year 3 of $5.00. After Year 3, dividends are expected to grow at the rate of 2.5% per year. Ace Frisbee Corp's Beta is 1.2. The consensus estimate of the coming year's market returns is 4% and T-bills currently offer a 1.5% return. How much should the shares be worth today?

Reference no: EM133034219

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