Dividend policy reflect company growth

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Reference no: EM131939811

The XYZ Corp. has decided that its dividend policy reflect company growth. The first quarterly dividend they intend to pay will be $0.80 per share 3 years from today. Quarterly dividend will then increase at a rate of 2% per quarter until the beginning of the 7th year from now, and then grow at 1.2% per quarter thereafter. What price should you pay for a share of XYZ stock ifyou expect an effective quarterly rate of 0.03555?

Reference no: EM131939811

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