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Waterway Natural Foods' current dividend is $10.00. You expect the growth rate to be 0 percent for years 1 to 5, and 2 percent for
Waterway Natural Foods' current dividend is $10.00. You expect the growth rate to be 0 percent for years 1 to 5, and 2 percent for years 6 to infinity. The required rate of return on this firms equity is 10 percent.
- The expected dividend at the end of year 5 is $10.
- The expected dividend at the end of year 6 is $10.20
- The expected dividend at the end of year 5 (right after the year 5 dividend is $127.50)
What is the price of the stock today?
**$79.17 was incorrect
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