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Due to a new vehicle design, earnings and dividends in an automobile manufacturing company are expected to grow at a rate of 25% for the
Due to a new vehicle design, earnings and dividends in an automobile manufacturing company are expected to grow at a rate of 25% for the next 3 years. After this period, the firm is expected to resume growth at the industry average of 10% thereafter. The firm recently paid a dividend of $1 and the required return is 15%. What is the most you should pay for the company's stock?
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