Common stock currently pays no dividends

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Billy's Custom Cycles' common stock currently pays no dividends. The company plans to begin paying dividends beginning 3 years from today. The first dividend will be $3.00 and dividends will grow at 5 percent per year thereafter. Given a required return of 15 percent, what would you pay for the stock today? The answer should be $22.68 but I am not sure how to get it.

Reference no: EM131065714

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