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Question
The Textbook Production Company has been hit hard due to increased competition. The company's analysts predict that earnings (and dividends) will decline at a rate of 5 percent annually forever. Assume that rs = 11 percent and D0 = $2.00. What will be the price of the company's stock three years from now?
a. $27.17
b. $6.23
c. $28.50
d. $10.18
e. $20.63
Answer
This answer is hidden. It contains 89 characters.
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