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Business, 29.01.2021 16:00 kbarnes22

Use the information about Company X below to help answer this question: The company just paid out $60M in dividends.
Dividends will grow at 12% for each of the next 5 years.
Dividends will grow at 8% every year thereafter (beginning in year 6)
The company has 75M shares outstanding
The company's cost of equity is 16%
The company's WACC is 10%

Using the Dividend Discount Model for Non-Constant growth, the value of one share of the company's stock today is closest to:

a. $12.00
b. $12.67
c. $22.40
d. $41.50
e. $51.50

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Answers: 2

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