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What is the value of a share of a stock

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Reference no: EM132985006

Problem 1: You're trying to estimate the value of a stock. They don't currently pay a dividend, but you think they will begin to pay a dividend of $0.25 per share in 6 years. You predict that the dividends will double every year for the first 5 dividend payments, then afterwards will grow at a stable 4% growth rate forever. The appropriate discount rate for this stock is 12%. What is the value of a share?

Reference no: EM132985006

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