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A small firm currently pays no dividends. You overhear the CFO tell the CEO that the plan is to begin paying dividend s in 3

A small firm currently pays no dividends. You overhear the CFO tell the CEO that the plan is to begin paying dividends in 3 years. The first dividend will be $2.5. Dividends are expected to grow at 8% for the following two years and then 5% thereafter, forever. Given a required return of 12% (discount rate), what would you pay for the stock today? Draw out a timeline please as well.

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