Example-variable growth in dividends

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Example: Variable growth in dividends

-Rankine Ltd has just paid a $0.90 annual dividend.

-The required return on Rankine's shares is 15%.

-Current growth rate (g) of 10% per annum applies for the next 3 years.

-After year 3, growth rate (g) falls to 6% indefinitely.

-What is the value of Rankine shares today?

Reference no: EM132516523

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