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Author Question: One year ago Indigo Company paid a $4 dividend, and during the current year it has experienced a 10% ... (Read 15 times)

bobypop

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One year ago Indigo Company paid a $4 dividend, and during the current year it has experienced a 10% growth rate. The company just paid a dividend of $4.40, i.e., D(o) = 4.40. Due to a new, advanced production technique, Indigo expects to achieve a dramatic increase in its short-term growth rate, to 25% annually for the next 3 years. After this time, growth is expected to return to the long-run constant rate of 10%. If investors require a 15% rate of return, at what price should the stock of Indigo Company be selling today? (Round to the nearest whole dollar.)
◦ $140
◦ $181
◦ $126
◦ $110
◦ $157


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Marked as best answer by bobypop on Apr 25, 2021

helenmarkerine

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bobypop

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Reply 2 on: Apr 25, 2021
Excellent


kswal303

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Reply 3 on: Yesterday
:D TYSM

 

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