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ABC stock just paid a dividend of $1.25 (D0 = $1.25). Dividends are expected to grow 20% per year for three years and then 5%

ABC stock just paid a dividend of $1.25 (D0 = $1.25). Dividends are expected to grow 20% per year for three years and then 5% per year thereafter. If the required rate of return for ABC stock is 12%, what should its price be in an efficient market?

$33.80

None of these

$26.95

$36.22

$27.37

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Question

ABC stock just paid a dividend of $1.25 (D0 = $1.25). Dividends are expected to grow 20% per year for three years and then 5%

ABC stock just paid a dividend of $1.25 (D0 = $1.25). Dividends are expected to grow 20% per year for three years and then 5% per year thereafter. If the required rate of return for ABC stock is 12%, what should its price be in an efficient market? $33.80 None of these $26.95 $36.22 $27.37

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ABC stock just paid a dividend of $1.25 (D0 = $1.25). Dividends are expected to grow 20% per year for three years and then 5% per year thereafter. If the required rate of return for ABC stock is 12%, what should its price be in an efficient market?

$33.80

None of these

$26.95

$36.22

$27.37