Question: A stock is not expected to pay a dividend over the next four years. Five years from now, the company anticipates that it will establish

A stock is not expected to pay a dividend over the next four years. Five years from now, the company anticipates that it will establish a dividend of $1.00 per share (i.e., D5 = $1.00). Once the dividend is established, the market expects that the dividend will grow at a constant rate of 7 percent per year forever. The risk-free rate is 3.5 percent, the company

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