Question regarding the common stock valuation

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Common stock valuation: Perry Motor's common stock just paid its annual dividend of $1.80 per share. The required return on the common stock is 12%. Estimate the value of the common stock under each of the following assumptions about the dividend:

(a.) Dividends are expected to grow at an annual rate of 0% to infinity.

(b.) Dividends are expected to grow at a constant annual rate of 5% to infinity.

(c.) Dividends are expected to grow at an annual rate of 5% for each of the next 3 years, followed by a constant growth rate of 4% in years 4 to infinity.

Reference no: EM131114248

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