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Suppose that a company will pay a $0.85 per-share-per-year dividend next year. It is expected to increase that dividend by $0.05 each year for three
Suppose that a company will pay a \$0.85 per-share-per-year dividend next year. It is expected to increase that dividend by $0.05 each year for three years (to year four). In year four, the PE ratio of the firm is expected to be 19 . Earnings were $2 per share last year and are expected to grow at 9% each year to year four. Suppose that the required rate of return is 10%. What is the value of the stock? The value of the stock is Round your answer to the nearest two decimal places
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