New firm in rapidly growing industry

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Reference no: EM132011683

The Newton Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 15% a year for the next four years (Year 1, Year 2, Year 3, and Year 4) and then increase at the constant growth rate of 5% per year indefinitely. The company just paid its annual dividend in the amount of $1.50 per share. What is the current value of Newton Co.’s stock if the required rate of return is 8%?

Reference no: EM132011683

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