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Lamps common stock currently pays no dividend, but analysts forecast that it will start by paying a $0.80 dividend 2 years from now. Analysts then

Lamps common stock currently pays no dividend, but analysts forecast that it will start by paying a

$0.80 dividend 2 years from now. Analysts then expect the dividend to grow at 4% annually, forever,

beginning in year 3. Assuming a 12% cost of equity capital (i.e., discount rate), what should Lamps

stock sell for today?

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