Company pays a current dividend d0 of 120 per share on its


Question: A company pays a current dividend (D0) of $1.20 per share on its common stock. The annual dividend will increase by 3% and 4%, respectively, over the next two years (D1, D2), and by 6% per year thereafter. The appropriate discount rate is 12%. What is P0?

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Finance Basics: Company pays a current dividend d0 of 120 per share on its
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