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Consider a firm that has just paid a dividend of $2. An analyst expects dividends...

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Accounting

Consider a firm that has just paid a dividend of $2. An analyst expects dividends to grow at a rate of 8% per year for the next five years. After that dividends are expected to grow at a normal rate of 5% per year. Assume that the appropriate discount rate is 7%. What would be the value of the dividends after five years?


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