According to the dividend growth model

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Reference no: EM131060541

You’ve collected the following information from your favorite financial website. Stock (Div) SIR Company 2.40 High 131.01 Low 69.90 Div Yield 2.7% PE Ratio 10 Closing Price 89.05 Net Change 3.07 According to your research, the growth rate in dividends for SIR for the next five years is expected to be 19.5 percent. Suppose SIR meets this growth rate in dividends for the next five years and then the dividend growth rate falls to 5 percent indefinitely. Assume investors require a return of 14 percent on SIR stock. According to the dividend growth model, what should the stock price be today?

Reference no: EM131060541

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