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Best Product Inc. Share Price

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Best Products Inc., is a young start-up company. No dividends will be paid on the stock over the next twelve years, because the firm needs to plow back its earnings to fuel growth. The company will pay a $11 dividend in thirteen years and will increase the dividend by 5.5 % per thereafter. If the required return on this stock is 13%, what is the current share price?

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Solution Summary

The current share price for Best Product Inc is determined for a required return on the stock of 13%.

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Stock price at the end of year 13= Next year dividend/(Required ...

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