Suppose that Kojak, Inc., just paid a dividend of ($3.75) per share. The company will continue to

Question:

Suppose that Kojak, Inc., just paid a dividend of $$3.75$ per share. The company will continue to pay dividends for the next 20 years, and then go out of business. If the discount rate is 12 percent per year, what is the value of stock for a dividend growth rate of 20 percent? 12 percent? 6 percent? 0 percent? -5 percent?

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