8.) The required return on an investment is 10 percent. You estimate that firm Xs...
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8.) The required return on an investment is 10 percent. You estimate that firm Xs dividends will grow as follows:
Year Dividend
1 $1.20
2 2.00
3 3.00
4 4.50
For the subsequent years you expect the dividend to grow but at the modest rate of 4 percent annually. What is the maximum price that you should pay for this stock?
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