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Langley Enterprises pays a constant dividend of $1.30 a share. The company announced today that it will continue to do this for another 2 years after which time it will discontinue paying dividends permanently. What is one share of this stock worth today if the required rate of return is 7 percent?

1. $3.50
2. $2.60

3. $2.35

4. $2.12

5. $3.74

Basic Finance, Finance

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