Company will change to constant dividend policy

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Reference no: EM131131356

BDU Company has set up a new product line in January 2015. The dividend is expected to grow at 8% per year for the next 15 years. Then at 3% thereafter. The required return is 12% and the dividend in the coming year is $3.00.

1) What is the stock price?

2) After 15 years, the BDU Company will change to a constant dividend policy. What is the stock price?

Reference no: EM131131356

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