Sketch a time line of the dividend stream

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Reference no: EM132002564

Firm X just paid an annual dividend of $2.35 per share. This dividend is expected to grow at a rate of 19% per year over the next three years and then slow to a rate of 4% per year from that point forward. The required return on firm X’s shares is 8 percent.

a. Sketch a time line of the dividend stream

b. Estimate the intrinsic value of firm X’s shares today.

Reference no: EM132002564

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