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Consider a corporation that is just founded today. The company plans to pay a dividend of $1 per share each year in the first two
Consider a corporation that is just founded today. The company plans to pay a dividend of $1 per share each year in the first two years. Starting in year 3, its earnings are expected to grow at 8% per year, so the dividends are expected to grow at the same rate forever. The required return on the stock is 12%. What is the current stock price?
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