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Earnings and dividends per share-what is current stock price

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ACME Inc’s earnings and dividends per share are expected to grow indefinitely by 5% a year. If next year's dividend is $10 and the market capitalization rate is 8%, what is the current stock price?

ACME Inc’s growth will stop after year 3. In year 4 and afterward, it will pay out all earnings as dividends.   What is the stock price? Assume next year's EPS is $20.

Reference no: EM13809161

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