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3. The Walt Disney Corporation plans to retain and reinvest all of its earnings for the next three years; at the end of year 3
3. The Walt Disney Corporation plans to retain and reinvest all of its earnings for the next three years; at the end of year 3 the firm will pay a special dividend of $8 per share. Beginning in year 4, the firm will begin to pay a dividend of $2.50 per share, which is expected to grow at a 3% rate annually forever. Given a required return of 12%, what the stock should sell for today? |
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