Expect dividends to grow perpetually


Problem:

Netscrape Communications does not currently pay a dividend. You expect the company to begin paying a $3.6 per share dividend in 12 years, and you expect dividends to grow perpetually at 4.6 percent per year thereafter. If the discount rate is 14 percent, how much is the stock currently worth? Please justify your answer and also provide all calculations and formulas

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Finance Basics: Expect dividends to grow perpetually
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