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What price should the shares sell for at the end of year two

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Problem 1: Polycorp has just paid a dividend of $2. The company pays dividends annually. Dividends are expected to grow at 0.1 pa for the next two years and for 0.03 thereafter for the foreseeable future. At what price should the shares sell for at the end of year two if the required rate of return is 0.17?

Reference no: EM132964486

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