Answer to Question #180410 in Finance for Ashish

Question

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1.     Let’s assume that you are going to purchase a common stock that paid a dividend of $1.50 yesterday. Expected growth rate of this stock will be 12% per year for the next 2 years, and then 7% per year forever. How much should the investors pay for this stock today if they require a 12 percent rate of return?

Answer 1

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