For Year 1, the dividend is expected to grow by 7%, so the expected dividend D1 = D0 * (1 + g1) = $1.5 * (1 + 0.07) = $1.605.
For Year 2, the dividend is expected to grow at a constant rate of 4%, so the expected dividend D2 = D1 * (1 + g2) = $1.605 * (1 +
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