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Suppose you want to invest in a new tech stock that is growing quickly. The most recent dividend was $0.10. You expect dividends to grow
Suppose you want to invest in a new tech stock that is growing quickly. The most recent dividend was $0.10. You expect dividends to grow at 30% for the next five years. The 6thyear dividend will be 5% larger than the 5thyear dividend. At this point dividends will continue to grow at a 5% rate forever. If the applicable cost of stock is 14%, what is the price of this stock?
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