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Grandiose Growth has a dividend growth rate of 10%. The discount rate is 8%. The end- of-year dividend will be $5 per share.
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Answer #1

Present value(Year 1) = $5 / 1.08 = $4.63

Present value(Year 2) = $5(1.10) / 1.082 = $4.72

Present value(Year 3) = $5(1.10)2 / 1.083 = $4.80

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