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    Assume the stock is selling at $30.29. What would the stock price be if its dividends were expected to have zero growth?

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    1. Assume the stock is selling at $30.29. What would the stock price be if its dividends were expected to have zero growth?

    Now assume the company is expected growth of 30% for the next 3 years, then to return to its long-run constant growth rate of 6%. What is the stock's value under these conditions?

    2. Is the stock price based more on long-term or short-term expectations? Answer by finding the % of company A's current stock price based on dividends expected in more than 3 years in the future.

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    https://brainmass.com/business/dividend-yield/dividend-yield-problems-42433

    Solution Preview

    1.Assume the stock is selling at $30.29. What would the stock price be if its dividends were expected to have zero growth?
    If the firm's dividend doesn't grow, and remains $2 every year, the firm's Rr = 13%,
    Then Po = D / Rr = $15.38

    Now assume the company is expected growth of 30% for the next 3 years, then ...

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    The solution assists with answering the given dividend yield problems provided.

    $2.49

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