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Stephens Supply Company (SSC) is growing rapidly. Assume Todays stock price is $60. SSC currently pays no dividend but expects to pay its first dividend
Stephens Supply Company (SSC) is growing rapidly. Assume Todays stock price is $60. SSC currently pays no dividend but expects to pay its first dividend two years from today. SSC expects to maintain its current growth rate of 25% annually for the next three years (1 year after beginning to pay dividends), after which SSC expects the growth rate to decrease to 5% annually. If the appropriate discount rate is 12%, then what is the amount of the first dividend that SSC expects to pay?
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