What is value of a share of stock of dravo to an investor

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Reference no: EM131338543

The stock of Dravo Corporation currently pays a dividend (D0) at the rate of $2 per share.

This dividend is expected to increase at a 9 percent annual rate for the next three years, at a 7 percent annual rate for the following two years, and then at 4 percent per year thereafter.

What is the value of a share of stock of Dravo to an investor who demands a 24 percent rate of return on this stock?

Reference no: EM131338543

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