Nachman Industries just paid a dividend of D0 = $1.32. Analysts expect the company's dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The required return on this low-risk stock is 9.00%. What is the best estimate of the Stock's Current Fair Value?

A) $41.59
B) $42.65
C) $43.75
D) $44.87
E) $45.99

Ans: D) $44.87

Business

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