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You anticipate that XSensors Co. will pay a constant dividend of $2.72 each year for the next 10 years. After that, the dividend will increase to $4.69 and hold steady for another 10 years. After that, you expect the dividend will start increasing every year at a constant rate of 2.1 percent per year, forever. Your discount rate for this stock is 13.5 percent. How much are you willing to pay for this stock today?

Financial Management, Finance

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