Based on the dividends and the target price set by financial analysts, the value of the stock will be $57.40.
What is the value of the stock?
This can be found as:
= Present value of first dividend + Present value of second dividend + Present value of stock price in 2 years
Solving gives:
= 2 / 1.10 + 2.14/1.10² + 65/1.10²
= $57.40
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