What is the intrinsic value of the stock

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a) Cyclops Co. specialises in producing no-maintenance contact lenses. The earnings and dividend growth prospects of the company are disputed by two independent analysts. Zeta-Analytics is forecasting 5% growth in dividends indefinitely. However, SOL is predicting 20% growth in dividends, but only for the next three years, after which the growth rate is expected to decline to 4% for the indefinite future. The dividend per share is currently £3 and stocks with similar risk are currently priced to provide a 14% expected return. What is the intrinsic value of the stock according to SOL?

Reference no: EM132351106

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