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LPD will pay its first dividend of $2.40/share one year from now. Then, for the following five years, the dividend is projected to increase by
LPD will pay its first dividend of $2.40/share one year from now. Then, for the following five years, the dividend is projected to increase by 10%/year; thereafter, it will grow at a constant rate of 3% forever. If the required rate of return (discount rate) on LPDs stock is 15%, (a) what should be the price of the stock today? and (b) calculate what LPD's stock price should be eight years from now, instantaneously after Div8 is paid.
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