- Please provide step by step explanation.
Question:::: If Woodruff Industries just paid a dividend of D0 = $1.25. Analysts expect the company's dividend to grow by 20% this year, by 15% in Year 2, and at a constant rate of 4% in Year 3 and thereafter. The required return on this low-risk stock is 8.50%. What is the best estimate of the stock's current market value?
*Please show formula as to how the answer was found.
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