Calculate the price of Chico Company's stock today, to the nearest cent, if after one year it
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Question:
Calculate the price of Chico Company's stock today, to the nearest cent, if after one year it will have a dividend of $1.04 and then grow at a rate of 11% to a second dividend at t = 2. Thereafter, the growth in dividends slows to 5% per year. Investors think that an appropriate discount rate to use for cash flows for this firm is 8%.
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