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You are running a motor company. Analysts predict that its dividends will grow at 10 percent per year for the next five years. After that,

image text in transcribed You are running a motor company. Analysts predict that its dividends will grow at 10 percent per year for the next five years. After that, as competition increases, dividend growth is expected to slow to 7 percent per year and continue at that level forever. You company has just paid a dividend of $3 per share. What is the value of this company today if the interest rate is 5 percent? (4 marks)

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