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Our company announced that it will pay 1 $ of dividend per share today, and announced its dividends as 2 $ per share next year
Our company announced that it will pay 1 $ of dividend per share today, and announced its dividends as 2 $ per share next year (1st year), 3 $ in the 2nd year and 4 $ in the 3rd year. The company announced that after paying 4 $ of dividends, it will switch to a regular growth model in the dividends and the dividend growth rate will be fixed 8 percent. If the rate of return expected by the investors is 16 percent, calculate the current market value of the stock (P0) and the market value at year 6 (P6).
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