What will be equity value at the end of year t

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Reference no: EM133159196

Question - An analyst produces the following series of annual dividend forecasts:

Year

Expected dividend

t+1

$10

t+2

$20

t+3

$10

The analyst believes that dividends will be zero after year t+3. The company's cost of equity is 10 per cent. Under these assumptions, what will be equity value at the end of year t?

Reference no: EM133159196

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