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Question: A company has just paid a dividend of £x. The dividends are expected to grow at a higher rate r1 per year for the next n1 years and at a lower rate r2 per year for n2 years and then grows at an even lower rate r3 forever. (n1>=3, n2>=3) Suppose the required rate of return of the stock is 4%. Please suggest reasonable positive numbers for the above parameters and calculate the current value of this hypothetical stock.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92796801

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