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Consider a company that is not currently paying dividends. You pre- dict that in five years, the company will pay a dividend for the first

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Consider a company that is not currently paying dividends. You pre- dict that in five years, the company will pay a dividend for the first time. The dividend will be $0.50 per share. You expect this dividend to grow at 10 percent indefinitely. The required return on companies such as this one is 20 percent. What is the price of the stock today? A. $3.25. B. $2.41. C. $4.36. D. $5.19. E. None of the above

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