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Anticipate the share selling for at the beginning

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-STB shares currently pay a dividend of $5. This dividend is expected to grow at an annual rate of 15% for the next two years. The dividend is expected to decrease by $2 in year 3 and to grow at a constant annual rate of 7% thereafter. If you require a 20% rate of return on an investment such as this, how much would you be willing to pay per share.

-What price would you anticipate the share selling for at the beginning of year 3.

-If you anticipate selling the share at the beginning of year 2, how much would you pay for it today.

Reference no: EM132658687

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