Last dividend is expected to grow at the rate

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Dallas Corporation stock is selling at $47 a share. The company will pay a dividend of $3.50 at the end of one year, $4.00 at the end of two years, and then $4.50 at the end of three years. However, this last dividend is expected to grow at the rate of 4% forever. If your required rate of return is 13%, do you think you should buy this stock? What is the expected price of the stock after 10 years? Show solutions

Reference no: EM13920447

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