Company will keep a constant growth rate forever

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Reference no: EM131616091

Storico Co. just paid a dividend of $3.85 per share. The company will increase its dividend by 15 percent next year and will then reduce its dividend growth rate by 5 percentage points per year until it reaches the industry average of 5 percent dividend growth, after which the company will keep a constant growth rate forever. If the required return on Storico stock is 13 percent, what will a share of stock sell for today?

Reference no: EM131616091

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