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  3. 1) home supply inc. has paid a constant annual div

1) Home Supply Inc. has paid a constant annual dividend of $2.40 a share for the...

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Finance

1) Home Supply Inc. has paid a constant annual dividend of $2.40a share for the past 10 years. The firm just announced thatdividends will increase by 15% and will stay at that amount throughYear 3, after which time the dividends will increase by 6% per yearindefinitely. The required return on this stock is 12 percent.

What is the stock price of Home SupplyInc.?

Answer & Explanation Solved by verified expert
4.3 Ratings (795 Votes)
Step1 Dividend per share for the next 3 years Dividend in Year 1 D1 276 per share 240 x 115 Dividend in Year 2 D2 276 per share 240 x 115 Dividend in Year 3 D3 276 per share    See Answer
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