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finance, inc. is experiencing cash flow difficulties, and thus management has decided to reduce dividends for the next two years by 2 5 % and

finance, inc. is experiencing cash flow difficulties, and thus management has decided to reduce dividends for the next two years by 25% and 15% respectively. In the third year, the firm will return to a positive growth of 5% in its dividend. In the subsequent two years (years 4 and 5) dividend is expected to grow at 20% and 15% before leveling off at a constant rate of 6% starting year six. Finance, Inc most resent dividend was in the amount of $2. The company has a Beta of 1.25. The Risk-Free-Rate is currently at 2.5% and the S&P500 has an expected return of 10% What is the required return on the common stock of finance, inc. what is the terminal value used to calculate the DDM, and calculate the current intrinsic value (price) of the stock. Use a financial calculator

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