Assume ABC Corp. pays the dividend of $5.60 this year. For the next 25 years, the firm's dividend will grow by 5.2%, then it will grow by 4.6% each year afterwards. The required rate of return for the firm's industry is 11.1%. What is the present value of the firm's stock under the Dividend Discount Model?

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Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.