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10. A small firm currently pays no dividends. You overhear the CFO tell the CEO that the plan is to begin paying dividends in 2

10. A small firm currently pays no dividends. You overhear the CFO tell the CEO that the plan is to begin paying dividends in 2 years. The first dividend will be $2.55. Dividends are expected to grow at 7.5% for the following two years and then 2% thereafter, forever. Given a required return of 12% (discount rate), what would you pay for the stock today?

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