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Sea Side, Inc., just paid a dividend of $1.96 per share on its stock. The growth...

Sea Side, Inc., just paid a dividend of $1.96 per share on its stock. The growth rate in dividends is expected to be a constant 3.1 percent per year indefinitely. Investors require a return of 25 percent on the stock for the first three years, then a 20 percent return for the next three years, and then a 18 percent return thereafter. What is the current share price? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

    

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Answer #1

B 1 2 D1 3 D2 4 D3 5 04 6 D5 7 D6 8 D7 9 D8 10 Stock price in 7 years $ 2.02 $ 2.08 $ 2.15 $ 2.21 $ 2.28 $ 2.35 $ 2.43 $ 2.50

- umano nc A B C PVIF Present value 2 D1 =1.96*1.031 =1/1.25 =C2B2 3 D2 |=+B2*1.031 =+C2/1.25 =C3*B3 4 D3 =+B3*1.031 =+C3/1.2

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