Microsoft has just paid a dividend of $1 per share (this dividend is already paid sometimes...

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Microsoft has just paid a dividend of $1 per share (thisdividend is already paid sometimes called Dividend 0). It isestimated that the companys dividend will grow at a rate of 35% inyear 1 and 20% in year 2. The dividend is then expected to grow ata constant rate of 1% thereafter. The companys opportunity cost ofcapital is 11% what is an estimate Microsofts stock using thenonconstant growth technique?

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Required rate 1100 Year Previous year dividend Dividend growth rate Dividend current year Horizon value Total Value Discount factor Discounted value 1 1 3500 135 135 111 12162 2 135 2000 162 16362    See Answer
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Microsoft has just paid a dividend of $1 per share (thisdividend is already paid sometimes called Dividend 0). It isestimated that the companys dividend will grow at a rate of 35% inyear 1 and 20% in year 2. The dividend is then expected to grow ata constant rate of 1% thereafter. The companys opportunity cost ofcapital is 11% what is an estimate Microsofts stock using thenonconstant growth technique?

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