March Hair Ltd. just paid a dividend of $1.80, which it expects to be $2.90 next year

Question:

March Hair Ltd. just paid a dividend of $1.80, which it expects to be $2.90 next year and $4.00 the next year. After that time, the dividend will likely decline to 5 percent per year, forever. With required rates of return at 14 percent, what should investors pay for March Hair?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...

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