What is SDI's required rate of return (ks) using nonconstant DCF methodology? Assume the following conditions: SDI's current stock price is $15; investors expect a dividend cut to $0.20 in 1997, after which the company will experience a supernormal dividend growth rate of 20 percent per year out to 2001 and a normal growth rate of 14.9 percent in 2002 and thereafter.

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To calculate the required rate of return ks using nonconstant DCF methodology we need to use the div... View the full answer