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Stock price the analyst should expect now

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A company just started to pay dividends. Its dividend payout ratio is 40%. An analyst expected the company growing fast at the following first two years at a dividend growth rate of 10% per year. After that the company will slow down to an annual growth rate of 5% forever. The company's required rate of return is 14% per annual. If the company's last annual earning is $10 per share, what's the stock price the analyst should expect now?

Reference no: EM132481149

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