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ABC Co. paid a dividend of $5 per share. The company will increase its dividend by 10% next year and will then reduce its dividend
ABC Co. paid a dividend of $5 per share. The company will increase its dividend by 10% next year and will then reduce its dividend growth rate by 2.5 percentage point per year until it reaches the industry average of 2.5% dividend growth, after which the company will keep a constant growth rate of 2.5% till eternity. If the required rate of return is 10%, what is the share price of ABC Co. today?
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