A firm has just paid a dividend of $1.16 per share. The dividend is expected to grow
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Question:
A firm has just paid a dividend of $1.16 per share. The dividend is expected to grow at an initial growth rate of 11.6% per year, but the growth rate will then decline linearly over 15 years to a constant long-term growth rate of 3.6% per year. The cost of equity is 8.9%. What is the value of each share?
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