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What will be the price of stock twelve years from now

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Reference no: EM132864902

Problem 1: Toronto Inc. will pay its first dividend of $2.50 per share 9 years from now and will increase the dividend at a constant rate of 5% per year thereafter. If the required return on the company's stock is 10%, what will be the price of this stock 12 years from now?

Multiple Choice

Option 1: $50.00
Option 2: $57.88
Option 3: $89.79
Option 4: $94.28
Option 5: $60.78

Reference no: EM132864902

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