Compute the present value of the non-constant dividends

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Reference no: EM131449919

A stock is expected to pay dividends of $1.00, $0.75 and $2.00 for the next 3 years, respectively. After that dividends are expected to grow at a constant rate of 6% indefinitely. The required return on the stock is 10% during the non-constant growth period and 8% afterwards. Compute the present value of the non-constant dividends.

Reference no: EM131449919

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