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What is estimated share price presently

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Question - A pharmaceutical company is expected to earn $2 per share next year. The company has a payout ratio of 40%. Earnings are dividends are growing at a constant rate of 10% per year. However the analysts are estimating that the growth rate will be 7% a year for indefinite future. Investor requires a 15% rate of return on the company. What is it's estimated share price Presently?

Reference no: EM132594841

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