Find what should be the dividend at the end of year seven

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Softromic Inc. will issue dividends which grow 20 percent per year for the next 3 years, 12 percent for years 4-6, and at a constant rate of 6 percent thereafter. The company just paid a dividend of $2.25 and you require a 12% rate of return from this stock.

Question 1: What will be the dividend at the end of year three?

Question 2: What should be the dividend at the end of year seven?

Question 3: What is the expected market value of the stock at the end of the sixth year?

Question 4: How much is this stock worth to you at present?

Reference no: EM132599509

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