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(DDM estimation of growth rate) CattyTreat, a partnership for providing cosmetic services for cats, has paid the following di
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Answer #1
1] Dividend growth rate = (2/1.75)^(1/5)-1 = 2.71%
2] Required return on the stock per CAPM = 3.0%+3*7.5% = 25.50%
3] Price of the stock per constant dividend growth model = 2*1.0271/(0.2550-0.0271) = $                  9.01
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