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MDK, Inc. is a high growth firm that has never paid a dividend. The company just issued a press release stating that next year they
MDK, Inc. is a high growth firm that has never paid a dividend. The company just issued a press release stating that next year they plan on paying an annual dividend of $0.34. They also stated that dividends are expected to increase by 40% a year for each of the following four years and then increase by 4% annually thereafter. The required rate of return on this stock is 15%. What is the expected price per share of MDK stock six years from now? Select one: a. $9.12 b. $9.42 c. $12.35 d. $12.84 e. None of the above. C
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