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QUESTION
The XYZ Company just paid a dividend of D0 = $1.5 per share, and that dividend is expected to grow at a constant rate of 4.00% for the first 4 years...
The XYZ Company just paid a dividend of D0 = $1.5 per share, and that dividend is expected to grow at a constant rate of 4.00% for the first 4 years and then 2% per year from year 5 till forever. The company's beta is 1.1, the expected market return is 8%, and the risk-free rate is 3.00%.
