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Sylla Company expects to pay dividends of $2.20, $2.42, and $2.66 in one, two and three years, respectively. After that, dividends are expected to grow
Sylla Company expects to pay dividends of $2.20, $2.42, and $2.66 in one, two and three years, respectively. After that, dividends are expected to grow at a constant rate of 6% forever. Stocks of similar risk provide a return of 7% currently. You believe that after 3 years, inflation will increase by 2% so you will require a rate of return after year 3 that reflects this changed inflation expectation. What should the price of Sylla Company stock be today?
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