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K&G Holdings pays a dividend of $1.50. Its growth rate is 3% and the required rate of return is 10%. You have purchased it at

K&G Holdings pays a dividend of $1.50. Its growth rate is 3% and the required rate of return is 10%. You have purchased it at its fair value at this point. However, after one year, the K&G announced that it would be reducing its dividend growth to only 2% in perpetuity. At the same time, investors now demand a return of 12%. How much have you lost in your investment?

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