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PSI Corporation recently went public. In order to attract more shareholder interest, they have decided to offer the following dividends: Year 1: $3.00 per share
PSI Corporation recently went public. In order to attract more shareholder interest, they have decided to offer the following dividends: Year 1: $3.00 per share Year 2: $4.00 per share Year 3: $5.00 per share After year 3, dividends will grow at a constant rate of 5%. What would you be willing to pay for a share of PSI stock? (assume that the required rate of return for comparable firms is 10%)
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