What is the maximum price that you should pay for this stock

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Reference no: EM13911334

The required return on an investment is 11 percent. You estimate that firm X's dividends will grow as follows:

Year Dividend

1 $1.20

2 2.00

3 3.00

4 4.50

For the subsequent years you expect the dividend to grow but at the more modest rate of 9 percent annually. What is the maximum price that you should pay for this stock? Round your answer to the nearest cent.

Reference no: EM13911334

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