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Easy finance questions! Please show your work so I understand how you arrived at your answer, thanks!!
23. Develop a current stock value for a firm that is expected to have extraordinary growth of 25 percent for four years (from today), after which it will face more competition and slip into a constant growth rate of 5 percent. Its required return is 14 percent and next year’s dividend is expected to be $5.00.
24. For a firm that expects earnings next year of $10.00 per share, has a plowback ratio of 35 percent, a return on equity of 20 percent, and a required return of 15 percent, show the current stock value and next year’s expected stock value, assuming that growth is to be constant
25. Lincoln Thomas believes that the Harris Group will pay a dividend of $4 on its common stock next year. Thereafter, you expect dividends to grow at a rate of 12 percent a year in perpetuity. If Lincoln requires a return of 24 percent on his investment, how much should he be willing to pay for the stock?
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