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Business, 16.04.2020 04:55 masteric9646

You forecast that Dull company will pay a dividend of D₁=$40 at the end of this year. The dividend will decline in the second year (D₂=$20). After the second year, dividends will then grow at an annual rate of 10% (For example, D₃=$22, D₄=$24.2,...). What is the current fair price of the Dull stock when the required/expected return is 20%?

A. $168.06
B. $175.00
C. $188.89
D. $200.00
E. $206.67

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