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A stock that Andrew Luck has just added to his retirement portfolio is expected to pay its first dividend of $4.20 three years from now.
A stock that Andrew Luck has just added to his retirement portfolio is expected to pay its first dividend of $4.20 three years from now. The next year, the dividend will increase to $4.40, and at the end of the 5th year, the dividend will increase to $4.70. After the fifth year, future dividends are expected to increase at the rate of 3% per year forever. If the stock's required rate of return is 12%, what should the stock price be today?
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