Question: A stock is expected to pay a year - end dividend of $ 4 , i . e . , D 1 = $ 4

A stock is expected to pay a year-end dividend of $4, i.e., D1= $4. The dividend is expected to decline at a rate of 4.5% a year forever (g =-4.5%). If the company is in equilibrium and its expected and required rate of return is 6%, what is the expected price 3 years later?

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