Which company will keep constant growth rate forever

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Reference no: EM131328238

Company A just paid a dividend of $2.50. The company will increse its dividend by 8% next year and will then reduce its dividend growth rate by 2 percentage points per year until it reaches the industry average of 2 percent dividend growth, after which the company will keep a constant growth rate forever. What is the price of this stock today given a required return of 12%

Reference no: EM131328238

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