Question

Asked Nov 24, 2019

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- A young start-up company will not pay dividends on its stock over the next 9 years. The company will pay a dividend of $9 per share 10 years from today and will increase the dividend by 4 percent per year thereafter. If the required rate of return is 12 percent, what is the current share price?

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Hence, value of share at year 10 beginning is $112.5 which is determined by dividing t...

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