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Stock valuation

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A security analyst forecasts the dividends of Kalpert Enterprises for the next three years. Her forecast is D1=$1.50, D2=$1.75, and D3=$2.20. She also forecasts a price in three years of $48.50. The rate of return for similar-risk common stock is 14%. What is the value of Kalpert common stock?

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The solution explains how to calculate the value of common stock

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The value of Kalpert stock would be the present value of the cash flows from the stock. The cash ...

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