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A particular firms latest dividend is R1.00. The company expects to pay a dividend of R2.50, R3.00 and R3.50 over the next three years. They

A particular firms latest dividend is R1.00. The company expects to pay a dividend of R2.50, R3.00 and R3.50 over the next three years. They also expect the dividends to grow at 5% after the third year.

With a 10% required return, would you buy the share if it is trading at R55? Show all your calculations and justify your view.

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