Management of Blossom, a biotech firm, forecasted the following growth rates for the next three years: 35 percent, 28 percent, and 22 percent. Management then expects the company to grow at a constant rate of 9 percent forever. Te company paid a dividend of $1.25 last week. If the required return is 15 percent, what is the value of this stock. (Round to 2 decimal places)
Management of Blossom, a biotech firm, forecasted the following growth rates for the next three years: 35 percent, 28 percent, and 22 percent. Management then expects the company to grow at a constant rate of 9 percent forever. Te company paid a dividend of $1.25 last week. If the required return is 15 percent, what is the value of this stock. (Round to 2 decimal places)
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 22P
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Management of Blossom, a biotech firm, forecasted the following growth rates for the next three years: 35 percent, 28 percent, and 22 percent. Management then expects the company to grow at a constant rate of 9 percent forever. Te company paid a dividend of $1.25 last week. If the required return is 15 percent, what is the value of this stock. (Round to 2 decimal places)
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