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Worst Buy Corp. has a strange dividend outlook. This firm has just paid a dividend of $1 and expects to pay $1.25 one year from today; $1.75 two years from today and $2.00 three years from today.
After that period the dividend policy will stabilize and dividends are expected to grow at a constant rate of 4.5% for indefinite future. If the required rate of return is 11%, calculate the stock’s current market value.
Group of answer choices
$15.67
$27.52
$16.08
$18.18
$28.52
