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What is the fair stock price of Monsters Inc

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Question - Monsters Inc. will pay its first annual dividend of $2 per share exactly 4 years from today, and you expect its dividend to grow at a constant growth rate of 4% forever. Suppose its cost of equity is 12%, its cost of debt is 5%, its total debt ratio is 20%, and its marginal tax rate is 35%. What is the fair stock price of Monsters Inc. according to the Dividend Discount Model?

Reference no: EM133077005

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