How much would louie be willing to pay for the stock today

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Reference no: EM131972112

Louie has found a compeling chainsaw company he would like to invest in. The firm paid a dividend of $2.25 last year, and Louie's research shows the start-up company should be able to grow that dividend by 10% for the next 2 years at which point it would slow to a constant rate of 3%.

How much would Louie be willing to pay for the stock today if his required return is 11%?

Reference no: EM131972112

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