Market using to arrive at current valuation

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Shares of Alphabet Inc. are trading for $1000. Alphabet doesn't currently pay a dividend. Assume that it will commence paying annual dividends three years from today. Once started, it will pay dividends in perpetuity and they will grow at an annual rate of 125%. Alphabet investors require a return of 11.50%. What dividend is the market using to arrive at its current valuation?

Reference no: EM133003645

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