A firm is a fast growing firm and no dividend will be paid on the stock over

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A firm is a fast growing firm and no dividend will be paid on the stock over the next 9 years. The company then will pay a $12 dividend per share in year 10 and will increase the dividend by 5 percent forever. If the required rate of return for this stock is 13 %, what should be the intrinsic value of the firm. (Show work)

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Fundamentals Of Corporate Finance

ISBN: 9781265553609

13th Edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

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