Analysts expect dividends to grow at a rate of 20 for three


A stock just paid a dividend of $1.00 per share. Analysts expect dividends to grow at a rate of 20% for three years, 15% for the following two years, and then slow to a constant rate of 10% thereafter.

How much would an investor be willing to pay for this stock if her required return is 14%?

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Financial Management: Analysts expect dividends to grow at a rate of 20 for three
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