Today’s Price for a StockNext years dividend for ERT stock is expected to be $4.00. You expect it to be $4.00 in 2 years, also, but then you expect it to grow at an 8% annual rate forever. The required rate of return for years t=0 through t=2 is .20. The required rate of return for year t=3 onward is .25. What is the price of the stock today?
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