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    Calculate Wei's Current Stock Price

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    The Wei Company's last dividend was $1.75. The dividend growth rate is expected to be constant at 1.50% for 2 years, after which dividends are expected to grow at a rate of 8.00% forever. Wei's required return (rs) is 12.00%. What is Wei's current stock price?

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    Solution Preview

    Please see the attached file.

    The Wei Company's last dividend was $1.75.  The dividend growth rate is expected to be constant at 1.50% for 2 years, after which dividends are expected to grow at a rate of 8.00% forever.  Wei's required return (rs) is 12.00%.  What is Wei's current stock price?

    required return= ...

    Solution Summary

    Wei's current stock price given dividend, expected growth rate, required return are calculated in plain text and in the attached Excel file.

    $2.19

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