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Suppose Tom just bought stock in CleanAir Co., a renewable energy startup, and that Tom estimates that there will be a dividend of $4 per
Suppose Tom just bought stock in CleanAir Co., a renewable energy startup, and that Tom estimates that there will be a dividend of $4 per share paid out next year, and that the dividend is expected to grow at a constant rate of 3 percent per year. If the required rate of return on the stock is 7 percent, then using the discount dividend model, what will the value of the stock be one year from now?
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