What future dividend growth rate would be necessary

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Liverpool plc is expected to pay a dividend of £5 at the end of next year (i.e., at t=1). Dividends are annual and are expected to grow at a constant growth rate forever afterwards. The current share price is £100. Assuming that shareholders of Liverpool plc. require a rate of return equal to 6.5% per year, what future dividend growth rate would be necessary to make the current share price equal to the fair value of Liverpool plc?

Reference no: EM132775829

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