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Question 2. A company is expected to pay a dividend of $2.00 per share next year and the year after. After that dividends are expected
Question 2. A company is expected to pay a dividend of $2.00 per share next year and the year after. After that dividends are expected to grow by 8% per year (forever). The required rate of return on this stock by the market is 13%. Inflation is 2%.
Compute the (expected) Holding Period Return (HPR) over the next two years (express the HPR a percentage. Hint: if you cannot answer this question, then compute the current share price instead for part marks
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