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Part of Lifecycle Motorcycle Company’s income statement is as follows:             Income Statement               &nbsp

Part of Lifecycle Motorcycle Company’s income statement is as follows:

            Income Statement                   2019

Dividends                                 10,000,000

Common shares outstanding      10,000,000

Dividend per share                      1

Selected financial information: Required rate of return on equity 10%.

You anticipate that Lifecycle Motorcycle Company’s dividends will grow at 12% for two years and 6% thereafter. Using the two-stage DDM, calculate the current value (at the end of 2019, or the beginning of 2020) of a share of Lifecycle Motorcycle Company’s stock.

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jeff jeffy answered 1 year ago
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