Common stock

valueVariable

growth Lawrence Industries' most recent annual dividend was

$1.89

per share

(D0=$1.89),

and the firm's required return is

14%.

Find the market value of Lawrence's shares when dividends are expected to grow at

10%

annually for 3 years, followed by a

6%

constant annual growth rate in years 4 to infinity.

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Part 1

The market value of Lawrence's shares is

$