Question
You expect that Microsoft will pay a dividend of $1.50 in one year, $1.76 in two years, and $1.89 in three years. After that,
You expect that Microsoft will pay a dividend of $1.50 in one year, $1.76 in two years, and $1.89 in three years. After that, dividends are expected to grow at 3% per year. If your required rate of return is 7%, what should be the price of Microsoft today according to the Dividend Discount Model?
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