At what constant rate is the stock expected to grow

Reference no: EM132019896

Question: Nonconstant growth

Carnes Cosmetics Co.'s stock price is $71.36, and it recently paid a $1.50 dividend. This dividend is expected to grow by 26% for the next 3 years, then grow forever at a constant rate, g; and rs = 11%. At what constant rate is the stock expected to grow after Year 3? Round your answer to two decimal places. Do not round your intermediate calculations.

Reference no: EM132019896

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