What is the best estimate of stock current market value

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1. ABC’s last dividend paid was $1.5, its required return is 16.5%, its growth rate is 5%, and its growth rate is expected to be constant in the future. What is Sorenson's expected stock price in 7 years, i.e., what is P7?

2. ABC just paid a dividend of D0 = $1.4. Analysts expect the company's dividend to grow by 30% this year, by 27% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The required return on this stock is 14%. What is the best estimate of the stock’s current market value?

Reference no: EM131962452

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