What is the present value of the dividends cash stream

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Problem 1: A company recently paid a dividend of $4.00 (Do). The dividend has been growing at a rate of 5% and this growth rate will continue until the end of year 5 and then starting with year 6, the growth rate of dividends will fall to 3% indefinitely. What is the Present Value of the dividends' cash stream to the investor starting with the end of year 1 based on theses projections if the required rate of return is 8%?

Reference no: EM132911695

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