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Burke Tires just paid a dividend of D 0 = $1.32. Analysts expect the company's dividend...

Burke Tires just paid a dividend of D 0 = $1.32. Analysts expect the company's dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 6% in Year 3 and thereafter. The required return on this low-risk stock is 9.00%. What is the best estimate of the stock's current market value?

a. $53.75

b. $52.65

c. $59.30

d. $51.59

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Expert Solution

Ans is c.$ 59.30

Calculations-

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jeff jeffy answered 2 years ago
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