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Accounting

Problem:

Tim Taylor Tools is a young start-up company. No dividends will be paid on the stock over the next eight years because the firm needs to plow back its earnings to fuel growth. The company will then pay a $9 per share dividend in year 8 and will increase the dividend by 4 percent per year thereafter.

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Question: If the required return on this stock is 12 percent, what is the current share price?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91172393

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