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Robert Limited has just paid a current (annual) dividend of $1 which is expected to grow by 20% at the end of one year from

Robert Limited has just paid a current (annual) dividend of $1 which is expected to

grow by 20% at the end of one year from now and then by 15% at the end of two years

from now. The dividend growth rate will stabilize at a constant 5% p.a. thereafter. If the

cost of equity for Robert Limited is 20% p.a., what is the fair value of a Robert Limited

share at the present time?

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