Find the current price of the stock

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Reference no: EM132062550

Question

XYZ Inc. expects to pay a dividend of $3.25 per share on its stock one year from today. The dividend is expected to grow at a rapid rate of 20 percent per year for three years.

After that, dividends are expected to grow at a rate of 5 percent per year forever. The stock's discount rate is 12 percent. Find the current price of the stock.

Reference no: EM132062550

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