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A young start-up company is not expected to pay dividends for the next four years so that earnings can be fully retained and reinvested in
A young start-up company is not expected to pay dividends for the next four years so that earnings can be fully retained and reinvested in the firm. The company will then pay a $1.15 dividend in year 5. The dividend is expected to grow by 4.2% per year thereafter. If the required return on the stock is 13%, what is the current value of the stock, P0?
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