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Question 6. Payout policy (4 marks) A company currently pays a dividend of $2.00 per share, which is expected to grow at a rate of

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Question 6. Payout policy (4 marks) A company currently pays a dividend of $2.00 per share, which is expected to grow at a rate of 5% per year indefinitely. The required rate of return on the company's stock is 10%. The dividend tax rate is 20%. What is the present value of the stock according to the dividend discount model? (4 marks)

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