Draw timeline showing the minimum relevant cash flows

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Reference no: EM131319203

Beverley Hills Banking has been growing by leaps-n-bounds due to its superior customer service and personal knowledge of local markets and clients. As such, its dividend is expected to grow by 20% over the next 2 years, then by 15% for the following 2 years, and then will level off to a constant growth in dividends of 6%. Assume the dividend just paid was D0 and the required return is R.

Draw a timeline showing the minimum relevant cash flows and then write the equation to show what you should pay for a share of BHB stock today.

Reference no: EM131319203

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