Lawrence Industries most recent annual dividend was $1.80 per share, and the firms required rate...
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Lawrence Industries most recent annual dividend was $1.80 per share, and the firms required rate of return is 11%. Dividends are expected to grow at 8 % annually for 3 years, followed by a 5% constant annual growth rate in years 4 to infinity. a) What are the expected values of DIV1, DIV2, and DIV3? b) What should the stock price be three years from now and what is the stock price today? c) Find the dividend yield, DIV1/P0. d) What will next years stock price, P1, be? e) What is the expected rate of return to an investor who buys the stock now and sells it in one year?
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