A company expects to pay a dividend of 350 per share one


Question: A company expects to pay a dividend of $3.50 per share one year from today. The dividend is expected to grow at 25 percent per year for two years. Thereafter, the dividend will grow at 4 percent per year in perpetuity. If the appropriate discount rate is equal to 12 percent, what is the price of the company's stock today?

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Finance Basics: A company expects to pay a dividend of 350 per share one
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