Firm that is experiencing rapid growth

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Grow On, Inc. is a firm that is experiencing rapid growth. The firm yesterday paid a dividend of $8.70. You believe that dividends will grow at a rate of 21% per year for three years, and then at a rate of 9% per year thereafter. You expect the stock will sell for $168.00 in three years. You expect an annual rate of return of 14% on this investment. If you plan to hold the stock indefinitely, what is the most you would pay for the stock now?

Reference no: EM131553302

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