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What is the value of the common stock today

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Reference no: EM132611848

Question 1: Assume Bahir Dar S. Co. is a big IT solutions provider in Ethiopia which presently pays a dividend of Br. 1.60 per share and market price per share is Br. 30. The company expects to increase the dividend at a 20 percent annual rate the first four years, at 13 percent rate the next four years, and then grow the dividend at 7 percent rate thereafter. If the required rate of return is 14 percent, what is the value of the common stock today (show all your computations clearly and neatly)?

Reference no: EM132611848

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