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Pinky1234
 one year ago
Best ResponseYou've already chosen the best response.0Thirsty Cactus Corp. just paid a dividend of $1.20 per share. The dividends are expected to grow at 35 percent for the next 8 years and then level off to a 6 percent growth rate indefinitely. Required : If the required return is 13 percent, what is the price of the stock today?

keenlearner
 one year ago
Best ResponseYou've already chosen the best response.0\[d1=1.20(1+0.35)\div1.13^{1}\] \[d2=d1(1.035)\div(1.13)^{2}\] . . .d8\[=d7(1.035)\div(1.13)^{8}\] last cumulative dividend will be dn=\[d8\div(0.060.35)\]

keenlearner
 one year ago
Best ResponseYou've already chosen the best response.0now all these dividends to get the price of stock today

keenlearner
 one year ago
Best ResponseYou've already chosen the best response.0in d2 and d7 i have written 1.035...sorry i wroye it by mistake ..it will be 1.35
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