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can someone help? im not sure if i did it correctly 6. Suppose a firm expects to increase dividends by 12% in one year and
can someone help? im not sure if i did it correctly
6. Suppose a firm expects to increase dividends by 12% in one year and by 8% in two years. After that, dividends will increase at a rate of 6% per year indefinitely. If the last dividend was $3 and the required return is 12%, what is the price of the stock? SHOW ALL WORK USE: P0=D0(1+g)/(Rg)&P^0=(1+R)1D1+(1+R)2D2+(1+R)2P2D0=3.00D1=3.00(1+0.12)=3.36D2=3.36(1+0.08)=3.63D2=3.63(1+0.00)=3.85P2=(0.080.06)3.85=0.023.85=$192.5t0=(1+0.08)3.36+(1+0.08)2+(1+0.08)2192.5 Step by Step Solution
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