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Problem 5 (14 points, 20 minutes) A firm just paid dividend Do, and it is expecting both earnings and dividends to grow by O percent

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Problem 5 (14 points, 20 minutes) A firm just paid dividend Do, and it is expecting both earnings and dividends to grow by O percent for the first two years, followed by 5 percent for one year. After that, the company is expected to growth at a constant rate of 10 percent. The required rate of return is 15 percent, and its stock sells at the equilibrium price, Po = $49.87. What is the expected value of the next dividend (Di)

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