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You just paid $50 for a share of stock which pays annual dividends. You expect to receive the first dividend payment of $5 one year
You just paid $50 for a share of stock which pays annual dividends. You expect to receive the first dividend payment of $5 one year from now. After that, you expect dividends to increase by $X each year, forever. The price you paid implies that you would be happy with an annual return of 12%. What is X?
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