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Church Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to

Church Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to grow at a rate of 25% for the next 3 years, after which competition will probably reduce the growth rate in earnings and dividends to 6%, i.e., g = 0.06. The companys last dividend, D0, was $1.25, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 3.00% (Hint: You will need this data to find the required return, rs, for Church, Inc.). What are the expected dividends during the high-growth period (D1, D2, D3,). Also, what is the current price of the common stock today (P0)? D1 = _______________. D2 = _______________. D3 = _______________. Stock Price Today (P0) = ____________________.

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