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A company has just paid its first dividend of $2.05. Next year's dividend is forecast to...

A company has just paid its first dividend of $2.05. Next year's dividend is forecast to grow by 9 percent, followed by another 9 per cent growth in year two. From year three onwards dividends are expected to grow by 3.0 percent per annum, indefinitely. Investors require a rate of return of 15 percent p.a. for investments of this type. The current price of the share is (round to nearest cent) Select one: a. $19.59 b. $17.75 c. $9.53 d. $9.49

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Answer #1

the answer is option a. $19.59

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