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What would you be willing to pay for the following share of stock? The company's most recent dividend was $2. Dividends...

What would you be willing to pay for the following share of stock? The company's most recent dividend was $2. Dividends are expected to grow by 10% the first two years, by 7 percent the next two years, and then at a rate of 5% for the unforeseeable future. The required rate of return is 13%.

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Answer #1

Year Expected dividend $2.20 $2.42 $2.59 $2.77 $36.36 (2.77*1.05)/(0.13-0.05) Current share price pv @ 13% 0.8850 0.7831 0.69

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