You are considering an investment in Progressive stock, which is expected to pay a dividend of $3.00 a share at the end of the year (D1= $3.50) and has a beta of 0.9. The risk-free rate is 4.25% and the market risk premium is 6.5%. The company's stock currently sells for $40.00 a share, and its dividend is expected to grow at a constant rate g. Assuming the market is in equilibrium, what does the market believe will be the stock price at the end of 3 years. (That is, what is P3?)

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