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What is the estimate for the stock price today

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Reference no: EM133009536

Problem 1: Blue Jeans Inc. is a newly listed company on the TSX. The CEO has released a plan for their expected dividends which will be $1.10 next year and then grow at a 20% growth rate for the following four years. After that, the dividend is expected to grow at a sustainable growth rate of 2.5% per year forever. If the expected return on comparable investments is 7%, what is the estimate for the stock price today?

Option 1: $43.59
Option 2: $50.32
Option 3: $38.67
Option 4: $41.06

Reference no: EM133009536

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