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Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 18 percent...

Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 18 percent for the next 3 years, with the growth rate falling off to a constant 4 percent thereafter.

  

If the required return is 9 percent and the company just paid a $2.50 dividend. what is the current share price?

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Answer #1

Required rate of return on equity = 9.000% Dividend P.V factor Present value DO 2.5 D1 2.95 0.91743 2.706422018 D2 3.481 0.84

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