Finance Stocks valuation : Valuing stocks by ClassOf1

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									              Sub: Finance                                                Topic: Stocks and Their Valuation

              Question:
              Valuing stocks that have a non constant growth rate.
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              A stock is expected to pay a dividend of $1.00 at the end of the year (i.e., D 1 $1.00), which is
              expected to grow 25% in each of the following two years and at a constant rate of 6%,
              thereafter. If the stock's required return is 11%, what is the stock's price today?

                   ( ) $26.14
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