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You believe that a company will pay a $ 2 dividend per share next year and following this year the dividends will have a dividend

You believe that a company will pay a $

2

dividend per share next year and following this year the dividends will have a dividend growth rate of

6 %

annually in perpetuity. You want a

12 %

yield in your investment. How much will you be willing to pay for the price of the stock?

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