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Discount model to value the stock and compare

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Reitmans Ltd. currentlly has an annual dividend of $2.30. The discount rate for Reitmans is 8%. Dividends are expected to grow by 20% over the next three years, 15% percent for the seven years after that, and then 5% in perpetuity. Based on the current stock price of $185, would you invest in the stock today? Explain using the dividend discount model to value the stock and compare.

Reference no: EM132477943

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