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You are considering a stock that currently pays a $3 dividend. This dividend is expected to decline by 5% next year (so a negative growth rate for year 1), then grow at 15% per year for the next two years after that. After the third year, the growth rate will be 5% per year for the foreseeable future. If your required rate of return is 11%, how much would you be willing to pay for this stock?

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Financial Management, Finance

Category:- Financial Management
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