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A stock in your portfolio has just paid a dividend of $0.50. You expect the dividend to grow to $1.00 next year, to $1.50 the
A stock in your portfolio has just paid a dividend of $0.50. You expect the dividend to grow to $1.00 next year, to $1.50 the year after, and to $2.00 the year after that. Beyond that, you expect the dividend to grow at a rate of 5% forever. If the cost of capital for the stock is 12% per year, what is the value of the stock today? A. $32.40 B. $21.35 C. $27.43 D. $30.00
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