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Suppose a share of stock in a deteriorating industry just paid a $3 dividend, and dividends are expected to decline by 6% per year, forever.

Suppose a share of stock in a deteriorating industry just paid a $3 dividend, and dividends are expected to decline by 6% per year, forever. If investors use a 12% discount rate to value the shares, what is the value of a share today?

$18.75

$25.00

$24.00

$15.67

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