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Q . 1 8 . Supernormal Growth. Burton Corp. is growing quickly. Dividends are expected to grow at a rate of 2 5 percent for

Q.18. Supernormal Growth.
Burton Corp. is growing quickly. Dividends are expected to grow at a rate of 25 percent for the next
three years, with the growth rate falling off to a constant 6 percent thereafter. If the required return is
13 percent and the company just paid a dividend of $2.50, what is the current share price?
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