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Biogenetics, Inc plans to retain and reinvest all of their earnings for the next 30 years. Beginning in year 31, the firm will begin to pay a $12.00 per share dividend. The dividend will not subsequently change. Given a required return of 15%, what should the stock sell for today?

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Solution Preview

30 years from now, the stock price will be:
P(30) = $12/0.15 = ...

Solution Summary

This job finds the stock price.

$2.19