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Assume a company with growth rate 15% for 3 years and 5% thereafter, current dividend is...

Assume a company with growth rate 15% for 3 years and 5% thereafter, current dividend is $3 and the discount rate is 10%, what is the intrinsic value of the stock?

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Answer #1

Year Cash flows $3.45 $3.97 $4.56 $95.82 pv @10% 0.909091 0.82645 0.75131 0.75131 Present value $3.14 $3.28 $3.43 $71.99 $81.

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