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There is a stock, which will not pay dividends for 5 years. In year 6 it starts paying $2 annually for 4 years. After that time, it will increase its dividend by 3% yearly, and it expects to do that for 200 years. If you know, the risk premium is 7%, the default free rate is 4% and the stock relates 120 % to the stock market consistently, what is the price?

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Financial Management, Finance

Category:- Financial Management
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