Explain the reasons for the difference

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Question: Assume that a high tech company is expecting to grow at a rate of 25% over the next 4 years, and then decline over the next 3 years (years 5-7) to a growth rate of 10%. Determine the price of the stock that is currently paying a $1 dividend and has a discount rate of 17% by using:

a. the three-stage growth model

b. the H-model

c. explain the reasons for the difference

Reference no: EM131936903

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