Compute what should the price of the stock be today

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Problem 1: A common stock has just paid a dividend of $2.18/share. The dividend is expected to be $1.98/share in year one, $2.64/share in year two, and $2.80/share in year three. After that, the dividends are expected to stay constant in perpetuity. The required rate of return on the stock is 15%. What should the price of the stock be today?

Reference no: EM132982872

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