How much should you be willing to pay for this


You are considering the purchase of a shock that just paid an annual dividend of $1.00. Dividends are expected to grow at the rate of 20% per year for the next two years and then they are expected to have a constant growth rate of 10% forever. If you require a 14% rate of return, how much should you be willing to pay for this stock?

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Financial Management: How much should you be willing to pay for this
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