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QUESTION

Which is the amount that should be paid for a stock that will pay a dividend of $5.66 in one year and $6.84 in two years?

Which is the amount that should be paid for a stock that will pay a dividend of $5.66 in one year and $6.84 in two years? After that, the stock price will grow at a constant 5% per year forever.  The appropriate discount rate is 12%.  Show your answer to the nearest $.01.

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