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Spiffy just paid a dividend of $2. The rate of return is 8%. The dividend is expected to grow at a rate of 4% for
Spiffy just paid a dividend of $2. The rate of return is 8%. The dividend is expected to grow at a rate of 4% for the next two years. After two years, the dividend will grow at a constant rate of 6%. What is the value of this stock?
When determining the NPV of the 6% returns, would I use a denominator of 1.08^2 or 1.08^3?
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