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Hi-tech Co. has recently paid $4.80 as an annual dividend. Future dividends are projected at $5.80, $6.10, and $7.25 over the next three years, respectively.
Hi-tech Co. has recently paid $4.80 as an annual dividend. Future dividends are projected at $5.80, $6.10, and $7.25 over the next three years, respectively. Beginning four years from now, the dividend is expected to increase by 4.25 percent annually.
i) What is the terminal value at a discount rate of 13.5 percent? (5 pts)
ii) What is one share of this stock worth today at a discount rate of 13.5 percent? (5 pts)
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