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The company will pay a dividend of $14 per share 10 years from today and it will increase the dividend by 6 percent per year.
The company will pay a dividend of $14 per share 10 years from today and it will increase the dividend by 6 percent per year. If the required return on this stock is 12 percent, what is the current share price? Round to 2 decimal places.
I keep getting $75.13 but it is marked wrong.
My work is as followed:
14 / (12%-6%) = 233.3333 (repeating)
233.3333 / (1 + 0.12) ^10
= $75.13
Any assistance would be greatly appreciated. Thanks!
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