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Class Discussion Handout Q6. You are considering the purchase of a common stock that paid a dividend of S3.00 yesterday. You expect this stock to
Class Discussion Handout Q6. You are considering the purchase of a common stock that paid a dividend of S3.00 yesterday. You expect this stock to have a growth rate of 15 percent for the next 3 years. The long-run normal growth rate after year 3 is expected to be 5 percent (that is, a constant growth rate after year 3 of 5% per year forever). If you require a 14 percent rate of return, how much should you be willing to pay for this stock
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