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3) (20 points) A stock will pay an annual dividend of $1 in one year. It is expected that dividends will grow 15% a year

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3) (20 points) A stock will pay an annual dividend of $1 in one year. It is expected that dividends will grow 15% a year until the third year. The growth rate will decline to 3% after the third year and will stay constant thereafter. What is the price of this stock, if the expected return on the stock is 10%

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