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What must the current stock price be

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Question - The ABC Corporation's dividends per share are expected to grow indefinitely by 5% per year.

A. If this year's year-end dividend is $8 and the market capitalization rate is 10% per year, what must the current stock price be according to the dividend discount model (DDM)?

B. If the expected earnings per share are $12, what is the implied value of the ROE on future investment opportunities?

C. How much is the market paying per share for growth opportunity?

Reference no: EM133059655

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