Common stock valuation. Consider a share of stock that is expected to pay a dividend of $1.50.

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Common stock valuation. Consider a share of stock that is expected to pay a dividend of $1.50. The firm expects the dividend to increase by 10% during the following year, then by 15% the year after, and by 20% the year after. Following that, growth of 2% forever thereafter is expected. If the stock’s required return is 12%, what value would be assigned to the stock currently?

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