Determine appropriate discount rate of the stock

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Question: A fast-growing firm recently paid a dividend of $0.40 per share. The dividend is expected to increase at a 30 percent rate for the next four years. Afterwards, a more stable 12 percent growth rate can be assumed.

If a 13.5 percent discount rate is appropriate for this stock, what is its value? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Reference no: EM131796312

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