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A firm has just paid a dividend of $1.50 per share. Dividends are expected to grow by 6%pa for the next 3 years and then

A firm has just paid a dividend of $1.50 per share. Dividends are expected to grow by 6%pa for the next 3 years and then grown at a constant rate of 4%pa. Given a required rate of return of 10%pa, what is the maximum price you should pay for this share?

a. $35.15

b. $27.45

c. $25.33

d. $19.25

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