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Problem:

Combined Communications is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 21 percent a year for the next 4 years and then decreasing the growth rate to 4 percent per year. The company just paid its annual dividend in the amount of $1.30 per share.

Required:

Question: What is the current value of one share of this stock if the required rate of return is 8.25 percent?

$57.36
$47.91
$51.35
$56.58
$43.68

Note: Provide support for your underlying principle.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91168107

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