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3. Suppose BlueSky Inc. has a current dividend of Do = $4, which is expected to shrink at the rate, 81 = 7%, for 5

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3. Suppose BlueSky Inc. has a current dividend of Do = $4, which is expected to shrink at the rate, 81 = 7%, for 5 years but grow at the rate, g2 = 5%, forever. With a discount rate of r = 6%, what is the present value of the stock? (40 MARKS)

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