Gordon Growth model for stocks and TVM Clint Auto Sales

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Reference no: EM132028944

Gordon Growth model for stocks and TVM Clint’s Auto Sales just opened, selling stock to private investors. The management does not expect to pay dividends during its first three years. At the end of its fourth year, however, management plans to start annual dividend payments at $1.00 per share and to increase those dividends 4% annually thereafter. If Clint’s investors require a 12% return, to the nearest penny, what should Clint’s stock price be today?

Reference no: EM132028944

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