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    Value of a share

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    ABC Inc. is expected to begin paying dividends in 5 years. The initial dividend is expected to be 0.75 per share, and dividends are expected to grow at 5.0%. How do I calculate the value of a share (today) if the required return on the company is 8.0%?

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    Solution Preview

    Value of share is the present value of all dividends. Here the dividends start in year 5 and grow at a constant rate. ...

    Solution Summary

    The solution explains how to calculate the value of a share today.