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A company will pay an annual dividend, the first to be paid in exactly 8 years.The first dividend will be $3, and this will grow
A company will pay an annual dividend, the first to be paid in exactly 8 years.The first dividend will be $3, and this will grow by 2% per year, forever.Investors require a 10% annual return.
a) What is the stock price today?
b) What's the stock price two years later?
please show all calculations with excel, and how you got them
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Step: 1
To calculate the stock price today and two years later we can use the formula for the present value ...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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