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Find the internal rate of return (IRR) of buying a $ 325 stock now that's expected to pay annual dividends forever, with the next $
Find the internal rate of return (IRR) of buying a $325 stock now that's expected to pay annual dividends forever, with the next $6 dividend to be paid in one year (t=1). The dividend is expected to grow forever at 5% per annum . Therefore the second dividend (paid at t=2) is expected to be $6.3 (=(6*(1+0.05)^1). The IRR of buying this stock now is:
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