How much are willing to pay for a stock of h and h today

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Problem 1: G&G company has its dividend policy that pays increasing annual dividend on its common stock at the constant rate of 2.5% per year. If G&G paid its last dividend at $1.5, how much will the dividend be in 5 years?

Problem 2: H&H company made an announcement that it will start paying annual dividends, with the first dividend being $0.50. The following 2 years dividends will be $0.75 and $1.00. After that, the dividend will be increased by 2.5% per year. How much are you willing to pay for a stock of H&H today if you expect 8% market return?

Reference no: EM132828334

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