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YA Msafer recently paid a $2 annual dividend. The company is projecting that its dividends will...

YA Msafer recently paid a $2 annual dividend. The company is projecting that its dividends will grow by 20 percent next year, 12 percent annually for the two years after that, and then at 6 percent annually thereafter. Based on this information, how much should YA Msafer common stock sell for today if her required return is 10.5%?

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Solve quickly I get you two UPVOTE directly
Thank's
Abdul-Rahim Taysir

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Expert Solution

Year Particulars Cash flow × discount rate Present value
1 Dividend               2.40             0.90498 $            2.17
2 Dividend               2.69             0.81898 $            2.20
3 Dividend               3.01             0.74116 $            2.23
3 Share price             70.92             0.74116 $          52.56
3.01*(1+ 0.06) /( 0.105-0.06)
Stock price today $          59.16

Stock price is 59.16

jeff jeffy answered 2 years ago
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