You have estimated that the dividend will continue to grow


A company just paid a dividend of $1.70 per share. You expect the dividend to grow 14% over the next year and 9% two years from now. After two years, you have estimated that the dividend will continue to grow indefinitely at the rate of 5% per year. If the required rate of return is 11% per year, what would be a fair price for this stock today? (Answer to the nearest penny.)

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Financial Management: You have estimated that the dividend will continue to grow
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