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Question: A firm has just paid (the moment before valuation) a dividend of $0.55 and is expected to exhibit a growth rate of 10 percent that can continue for only five years, after that its growth will decline linearly for four years to reach the steady state 6 percent growth rate.

If the appropriate discount rate is 12 percent, what is the value of the stock?

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Category:- Basic Finance
Reference No.:- M92813162

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