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Darla Davidovics would like to purchase the stock of Dalmation Dolls Inc. The company plans to pay a dividend of $4.18 next year which will
Darla Davidovics would like to purchase the stock of Dalmation Dolls Inc. The company plans to pay a dividend of $4.18 next year which will grow by 5.2% in the second year of the holding period. The dividend is expected to grow by 7.5% in the third year of the holding period and Darla expects to sell the stock at the end of that year for $85. If Darlas expected rate of return on this stock is 21%, what is the maximum she would pay if she purchases the stock today ?
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