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A firm has been growing at 20% per year, and you expect this growth rate will continue for another 3 years. After that it will
A firm has been growing at 20% per year, and you expect this growth rate will continue for another 3 years. After that it will face more competition and slip into a constant growth rate of 5% forever. If the discount rate is 10% and last dividend paid was $3. (a) What will the next dividend be? (b) What is the expected price of the stock 3 years from now? (c) What should the stock price be today?
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