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What is the maximum price that a prudent investor

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Valorous Corporation is expected to pay a dividend of $1.75 per share at this year's end. The two years after that, the yearly dividend payments of the company are expected to increase by 20% each year. From then onwards, the yearly dividend payments are expected to increase by 4% each year indefinitely. If investors require a return of 9% for holding Valorous stock, what is the maximum price that a prudent investor would be willing to pay for a share of Valorous stock today?

Reference no: EM133004052

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