How much should you pay for the stock today

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Question: A stock is expected to generate a cash flow of $2 a year from today and the cash flow is expected to grow at 20% for 3 years. After year 4, the cash flows are expected to stabilize and grow 1% in perpetuity. If the appropriate discount rate for this investment is 10%, how much should you pay for the stock today?

Reference no: EM133432542

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