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QUESTION 1 Lungu Mulekwa Ltd.s last dividend was K1.25. You plan to purchase the stock because you feel that the growth rate will increase to

QUESTION 1

Lungu Mulekwa Ltd.s last dividend was K1.25. You plan to purchase the stock because you feel that the growth rate will increase to 7% for the next 3 years and 6% thereafter. Calculate the maximum price you are willing to pay for the stock if you require a 12% return. [12 Marks]

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