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Mcgonigal''s meats, inc. currently pays no dividends

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McGonigal's Meats, Inc. currently pays no dividends. The firm plans to begin paying dividends in 3 years (at the end of t3). The first dividend at that time will be $1 and dividends are expected to grow at 5% per annum thereafter.

Given shareholders demand a 12% return on their investments, what is the price of the stock today (t0)? (5 marks)

 

Reference no: EM13705304

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Mcgonigal''s meats, inc. currently pays no dividends : McGonigal's Meats, Inc. currently pays no dividends. The firm plans to begin paying dividends in 3 years (at the end of t3). The first dividend at that time will be $1 and dividends are expected to grow at 5% per annum thereafter.
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