Calculate the expected price of the stock

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A stock you are interested in paid a dividend of $1 this morning. If you buy the stock today, you will get the first dividend after one year. The anticipated growth rate in dividends and earnings is 25% for the next 2 years before settling down to a constant 5% growth rate. The discount rate is 12%. Calculate the expected price of the stock.

Reference no: EM13766398

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