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Financial analysts forecast Crestwood Equity Partners (CEQP) growth for the future to be 3.1 percent. The...

Financial analysts forecast Crestwood Equity Partners (CEQP) growth for the future to be 3.1 percent. The firm just paid a $1.22 dividend. What is the value of their stock when the required rate of return is 13.9 percent?

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Answer #1

Ans $ 11.65

P0 = Price of Share
D1 = Current Dividend
Ke = Cost of Equity
g = growth rate
P0 = D1 / (Ke - g)
P0 = 1.2578 / (13.9%- 3.1%)
P0 = 11.65
D1 = D0* (1 + g)
D1 = 1.22* (1 + 3.1%)
D1 = 1.2578
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