Assume that you are using the dividend discount model the, Ask an Expert

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Assume that you are using the dividend discount model (the Gordon model) to value stock. The stock currently pays no dividends, but expectedto begin paying dividends $3.00 per share in four years.

Suppose the stock is expected to grow at a rate of 15% for the next five years that it started paying dividends, then slows to a long-term growth rate of 5%, how much is that stock worth today?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92257530

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