Question
New Grow Venture Inc. is a new newly listed young firm that is going through a very heavy expansion phase. Because the company is growing
New Grow Venture Inc. is a new newly listed young firm that is going through a very heavy expansion phase. Because the company is growing at a significant rate, management would like to reinvest all profits generated over the next 9 years back into operations, as such, no dividend will be paid over this period. The company however expects to be able to start paying dividends after that, starting with a $2.68 dividend at the end of year 10. The dividend will grow at 22% for the next 3 years, and at 14% for the next 2 years, stabilizing at a normal growth rate of 4.5% after that. If the stock has a required return of 19.5%, what is the current price per share of the stock right now?
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