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You are planning to buy a stock that has just paid a dividend (D0) of $2.50. In addition, you anticipate the following dividend growth rates:
You are planning to buy a stock that has just paid a dividend (D0) of $2.50. In addition, you anticipate the following dividend growth rates: Year 1 = 100% Year 2 = 0% Year 3 = -30% (note this is NEGATIVE 30%) Year 4 = 20% Years 5 through infinity = 4%Assume a discount rate of 10%. Based on this, what is the value of the stock today? (Hint: use the three-step process of non-constant growth DDM).be sure to detail your intermediate steps. thank you
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