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What is the value of the stock today

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A ?rm is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect ?rm to begin paying dividends, beginning with a dividend of $1.00 coming 3 years from today. The dividend should grow rapidly-at a rate of 50% per year- during Years 4 and 5; but after Year 5, growth should be a constant 8% per year. If the required return is 15%, what is the value of the stock today?

Reference no: EM133003090

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