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Camel Company is a small start - up firm that will institute a dividend payment, a S 0 . 2 5 dividend for the first

Camel Company is a small start-up firm that will institute a dividend payment, a S0.25 dividend for the first time at the end of this year. The company expects rapid growth over the next four years and will increase its dividend to $0.50, then to $1.50 and then to $3.00 before settling into a constant growth dividend pattern with dividends growing at 5% every year. If you believe that company will deliver this dividend pattern and you desire a 13% return on your investment, what price should you pay for this stock?

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