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21. Moon Traders is a start-up company and is not expected to pay any dividends for four years. Beginning in Year 5, earnings are expected
21. Moon Traders is a start-up company and is not expected to pay any dividends for four years. Beginning in Year 5, earnings are expected to stabilize and grow at a sustainable rate of 6% indefinitely and the firm is expected to pay out 40% of its earnings in dividends. Analysts estimate that the firm's earnings in Year 5 are going to be $2.95 per share. Given a required rate of return of 11%, the value of the stock today is closest to: A. $23.60 B. $14.00 C. $15.55
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