Farrowtech currently does not pay a dividend and they have


Farrowtech currently does not pay a dividend and they have announced to the market that they will not pay a dividend for the next ten years. However, analysts expect that they will pay their first dividend of $3.66 in eleven years and they feel that the company will double the annual dividend payment each year for the following 3 years (i.e. years 12-14). After that time (i.e. years 15 and beyond), they expect the company to level off their growth with their dividend growing at a constant rate of 5 percent per year thereafter. What is one share of this stock worth today if the market rate of return on similar securities is 24 percent?

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Financial Management: Farrowtech currently does not pay a dividend and they have
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