Question: Please help! Staton-Smith Software is a new start-up company and will not pay dividends for the first five years of operation. It will then institute
Staton-Smith Software is a new start-up company and will not pay dividends for the first five years of operation. It will then institute an annual cash dividend policy of $3.50 with a constant growth rate of 5%, with the first dividend at the end of year six. The company will be in business for 25 years total. What is the stock's price if an investor wants a. a return of 11% ? b. a return of 13% ? c. a return of 22% ? d. a return of 40%
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