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You are analyzing stock for a possible purchase. ABC just paid a dividend of $2.50 yesterday. You expect the dividend to grow at the rate
You are analyzing stock for a possible purchase. ABC just paid a dividend of $2.50 yesterday. You expect the dividend to grow at the rate of 10% per year for the next 3 years; 6% for the next 4 years and after that 3% forever. if you want to buy the stock how much do you want to pay for it now? The cost of equity is 8%.
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