Two years from now, Alpha stock will pay dividends to its shareholders for the very...
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Two years from now, Alpha stock will pay dividends to its shareholders for the very first time. The first dividend amount will be $2.50 per share and afterwards it will grow indefinitely at a constant growth rate of 3%. If the discount rate is 10%: - What is Alpha stock's intrinsic value today? - Determine whether Alpha stock is currently overpriced or underpriced based on a given market stock price of $34/share.
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