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common stock valuation
06-23-2010, 07:26 PM
Post: #1
common stock valuation
ABC Co. just paid a dividend of Rs.7.50 per share. The company will increase its dividend by 15% next year, and then will reduce this dividend growth rate by 5% annually until it reaches the industry average of 5 percent, after which the company will keep a constant growth rate forever. If the required return on ABC stock is 14.50 percent, what will be a share of stock sell for today?
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