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    Price of dividend paying stock

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    The corporation projects to pay a dividend of $0.75 next year and then have it grow at 12% for the next 3 years, before growing at 8% indefinitely thereafter. the equity has a required return of 10% in the market. What should the price of the stock be?

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    https://brainmass.com/business/annuity/price-dividend-paying-stock-204546

    Solution Preview

    Please see attached file for complete solution as work done with the help of equation writer may not print here.

    Solution:
    NPVGO model is to be used.

    Price of stock will be ...

    Solution Summary

    The solution explains the model for finding out price of stock, which is expected to pay a series of varying dividend.

    $2.19

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