Reference no: EM131315815
A company currently pays of dividend of $1.5 per share (D0= $1.5). It is estimated that the company's dividend will grow at a rate of 18% per year for the next 2 years, then at a constant rate of 7% thereafter. The company's stock has a beta of 1.4, the risk-free rate is 7.5%, and the market risk premium is 5%. What is your estimate of the stock's current price? Round your answer to the nearest cent.
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