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The required return on an investment is 10%. You estimate that firm Xs dividend will grow as follows: Year Dividend 1 1.20 2 2.00 3

The required return on an investment is 10%. You estimate that firm Xs dividend will grow as follows:
Year Dividend
1 1.20
2 2.00
3 3.00
4 4.50
For the subsequent years you expect the dividend to grow but at the more modest rate of 4% annually. What is the maximum price that should pay for this stock?

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