Micro Corp. just paid dividends of $2 per share. Assume that over the next three years dividends
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Question:
Micro Corp. just paid dividends of $2 per share. Assume that over the next three years
dividends will grow as follows, 5% next year, 15% in year two, and 25% in year 3. After that growth is
expected to level off to a constant growth rate of 10% per year. The required rate of return is 15%.
Calculate the intrinsic value using the multistage model.
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