Jenny Banks is interested in buying the stock of Fervan, Inc., which is increasing its...
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Accounting
Jenny Banks is interested in buying the stock of Fervan, Inc., which is increasing its dividends at a constant rate of 6.85 percent. Last year the firm paid a dividend of $2.65. The required rate of return is 19.65 percent.
What is the current value of this stock? (Do not round intermediate calculations. Round answer to 2 decimal places, e.g. 15.20.)
Current value
$
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What should be the price of the stock in year 5? (Do not round intermediate calculations. Round answer to 2 decimal places, e.g. 15.20.)
Price of stock
$
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