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What is estimate of stock current price for nonconstant

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Problem 1: Nonconstant Dividend Growth Valuation A company currently pays a dividend of $2.8 per share (D0 = $2.8). It is estimated that the company's dividend will grow at a rate of 15% per year for the next 2 years, and then at a constant rate of 8% thereafter. The company's stock has a beta of 1.2, the risk-free rate is 7%, and the market risk premium is 2.5%. What is your estimate of the stock's current price?

Reference no: EM132957411

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