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A company’s stock price is currently $52.50. This company is expected to grow at the constant...

A company’s stock price is currently $52.50. This company is expected to grow at the constant rate of 4% for long time. If the investors’ required return is 12% what will be this company’s price in 5 years?

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Answer #1

Stock price in 5 years:

= $52.50×(1+4%)^5

= $63.87

Hence, stock price in 5 years was $63.87

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