Question: Stetson corporation does not pay divedends because it is expanding rapidly and needs retain all earnings. The first divedednd of 1.20 coming 4 years from

Stetson corporation does not pay divedends because it is expanding rapidly

Stetson corporation does not pay divedends because it is expanding rapidly and needs retain all earnings. The first divedednd of 1.20 coming 4 years from today. Grows at a rate of 60% per year during 5 and 6. After year 6 they will grow at constant rate of 5% per year. If the required return on the stock is 16%, what is the value of the stick today, assume market is equilibrium with the required equal to the expected return

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