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6 September, 18:03

A firm does not pay a dividend. It is expected to pay its first dividend of $0.25 per share in 3 years (D3). This dividend will grow at 8 percent indefinitely. Using a 10 percent discount rate, compute the value of this stock

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  1. 6 September, 19:46
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    If this growth rate continues, what would be the stock price in four years if the P/E ratio remained unchanged? What would the price be if the P/E ratio increased
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