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A company has suspended its dividends in the face of temporary adversities in its business. You expect the company to restore its dividends in year
A company has suspended its dividends in the face of temporary adversities in its business. You expect the company to restore its dividends in year 6 reverting to its normal retention ratio of 0.26. At that point, the return on equity is also expected to go back to its steady state value of 14.43%. Year 6 earnings per share are expected to be 9.7. Your required rate of return on the stock is 10.06%. What is the steady state growth rate of the company in percent?
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