Rebecca’s Butterfly Company, Inc., last week paid a dividend of $2.37. The company expects to grow at 8% for...

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Rebecca’s Butterfly Company, Inc., last week paid a dividend of $2.37. The company expects to grow at 8% for...

Rebecca’s Butterfly Company, Inc., last week paid a dividend of $2.37. The company expects to grow at 8% for the next 4 years and 5% forever thereafter. If the firm’s Cost of Capital is 10%, what is the value or price of the firm's stock today?

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Answer 1

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Year 1 2 3 Cash flows $2.56 $2.76 $2.99 $3.22 $67.71 pv @ 10% 0.9091 0.8264 0.7513 0.6830 0.6830 Present value $2.33 $2.28 $2

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Rebecca’s Butterfly Company, Inc., last week paid a dividend of $2.37. The company expects to grow at 8% for...

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Rebecca’s Butterfly Company, Inc., last week paid a dividend of $2.37. The company expects to grow at 8% for...