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You expect a company to pay a dividend of $4 per share next year and you expect dividends to grow at an annual rate of
You expect a company to pay a dividend of $4 per share next year and you expect dividends to grow at an annual rate of 1% for each year after that. The risk-adjusted discount rate is 10%. What is the present value of the dividend stream?
a) $22.44
b) $44.44
c) $56.25
d) $67.55
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