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A stock just paid a dividend (Do) of $3 per share. The dividend is expected to increase at a constant rate of 20% per year

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A stock just paid a dividend (Do) of $3 per share. The dividend is expected to increase at a constant rate of 20% per year for the next 4 years after which the growth rate is expected to be 5% per year forever. The stock has a beta of 1.5. The risk-free rate is 2 percent, and the market risk premium is 10 percent. Assuming market equilibrium, what is the price of the stock today (Po)? Select one: a. $3762 b. $42.16 c. $41.84 d. $38.52 e. $40.02 f. $42.98 g. $43.28 h. $36.96

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