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(c) Assume that a company listed on the Sunrise Stock Exchange expects to pay dividends amounting to 100 shillings per share next year, shillings 200
(c) Assume that a company listed on the Sunrise Stock Exchange expects to pay dividends amounting to 100 shillings per share next year, shillings 200 in the year that follows and 250 shillings in the following year. After that, dividends are expected to grow at constant 5% per year. If the required rate of return is 10%, what price should investors pay for such shares today
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