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The stock of a startup company is not expected to pay any dividends for the next six years. The first dividend the firm will pay
The stock of a startup company is not expected to pay any dividends for the next six years. The first dividend the firm will pay is expected to be a $3.50 dividend paid six years from today. After that, the firm plans to increase the dividend by 2% per year. The required rate of return on this stock is 11%. What is the value of the stock? Round all intermediate calculations to 6 decimal points. Your final answer should be within $0.05 of the correct answer choice. A) $16.40 B) $18.70 C) $20.79 D) $23.08
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