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Your broker offers to sell you some shares of Bahnsen & Co. common stock that paid a dividend of $3.50 yesterday. Bahnsen's dividend is expected
Your broker offers to sell you some shares of Bahnsen & Co. common stock that paid a dividend of $3.50 yesterday. Bahnsen's dividend is expected to grow at 8% per year for the next 3 years. If you buy the stock, you plan to hold it for 3 years and then sell it. The appropriate discount rate is 13%. Find the expected dividend for each of the next 3 years; that is, calculate D1, D2 and D3. Note that D0 = $3.50. Round your answer to the nearest cent.
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