What is the present value of the stock


Problem

Future Corp. is growing quickly. Dividends are expected to grow at a 20 percent rate for the next three years, with the growth rate falling off to a constant 6 percent thereafter. If the required return is 14 percent and the company just paid a $2.50 dividend, what is the present value of the stock?

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Finance Basics: What is the present value of the stock
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