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1. (Three-stage DDM) The current dividend for Connell Corp is $1.00. In stage 1, which lasts 3 years, the dividend will grow at 0% per
1. (Three-stage DDM) The current dividend for Connell Corp is $1.00. In stage 1, which lasts 3 years, the dividend will grow at 0% per year. In stage 2, which also lasts 4 years, the dividend will grow at 30% per year. Finally, in stage 3, the dividend will grow at 6% forever. A. If the required rate of return is 10%, what is the value per share? B. If the current market price of Connell Corp is $35, what will be your rate of return if you realize all of the dividends described in the model?
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