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A company just paid an annual dividend of $2.00 a share (D0 = $2.00). The dividend will increase by 10 percent for the next three
A company just paid an annual dividend of $2.00 a share (D0 = $2.00). The dividend will increase by 10 percent for the next three years and then increase by 4 percent annually thereafter (g = 4%). Assume that the required rate of return is 9 percent (R = 9%). What is the terminal value of the stock at the end of the third year (P3)?
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