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Suppose a firm is expected to increase dividends by 10% in one year and by 15% in two years. After that, dividends will increase at
Suppose a firm is expected to increase dividends by 10% in one year and by 15% in two years. After that, dividends will increase at a rate of 6% per year indefinitely. If the current dividend is $1.05 and the required return is 7.5%, what is the price ofthe stock? (20 points)
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