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a) A company will pay a 1 per share dividend in 1 year. The dividend in 2 years SECTION A estion 2: Will be 2

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a) A company will pay a 1 per share dividend in 1 year. The dividend in 2 years SECTION A estion 2: Will be 2 per share, and it is expected that dividends will grow at 5% per year thereafter. The expected rate of return on the stock is 12%. 1. What is the current price of the stock? (4 marks) 2. What is the expected price of the stock in a year's time? (4 marks)

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