Solution-Solve for dividend and for the price

Solve for dividend and for the price

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Reference no: EM132630396

Stephens Supply Company (SSC) is growing rapidly. SSC currently pays no dividend, but expects to pay its first dividend two years from today. SSC expects to maintain its current growth rate of 25% annually for the next three years (1 year after beginning to pay dividends), after which SSC expects the growth rate to decrease to 5% annually. If the appropriate discount rate is 12%, then what is the amount of the first dividend that SSC expects to pay?

Assume $60 (which will give you a first dividend two years from now of about $4 ($3.99). Solve for dividend and for the price.

Reference no: EM132630396

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Solve for dividend and for the price

Reference no: EM132630396

Reference no: EM132630396

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