Greenfield Environmental is expanding rapidly, and it currently needs to retain all of its earnings hence it does not pay any dividends However, investors expect Greenfield to begin paying dividends, with the first dividend of $0 40 coming 3 years from today The dividend should grow rapidly at a rate of 30 per year during Years 4 and 5 After Year 5, the company should grow at a constant rate of 6 per year If the required return on the stock is 10 , what is the value of the stock today

Question: Greenfield Environmental is expanding rapidly, and it currently needs to retain all of its earnings; hence it does not pay any dividends. However, investors expect

Greenfield Environmental is expanding rapidly, and it currently needs to retain all of its earnings; hence it does not pay any dividends. However, investors expect Greenfield to begin paying dividends, with the first of $0.40 coming 3 years from today. The should grow rapidly-at a rate of 30% per year-during Years 4 and 5. After Year 5, the company should grow at a constant rate of 6% per year. If the required return on the stock is 10%, what is the value of the stock today?

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