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You expect a stock to pay dividends of $2.20, $2.80, $3.45, and $4.10 over next 4 years. You will receive first dividend exactly 1 year
You expect a stock to pay dividends of $2.20, $2.80, $3.45, and $4.10 over next 4 years. You will receive first dividend exactly 1 year from now. After this, you expect dividends to grow at constant rate of 5.50%
If the required return is 14%, what is the price of the stock today?
What is the expected price next year?
Please show work, thank you!
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