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Down-east Industries Incorporated has just paid its most recent cash dividend of $3.00 per share. Management expects dividends to grow at a constant rate of

Down-east Industries Incorporated has just paid its most recent cash dividend of $3.00 per share. Management expects dividends to grow at a constant rate of 8 percent per year forever and investors require a 16 percent rate of return.

What is the expected price of the share today? (3 marks)

What is the expected price of the share 5 years from today? (3 marks)

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