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Paying dividends in four years

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Assume that you are using the dividend discount model (the Gordon Growth Model) to value stock. The stock currently pays no dividends, but expected to begin paying dividends in four years. The firm's cost of equity is 9%. The first dividend is $5.00 and is expected to grow at a rate of 4% for the next three years that it started paying dividends, then slows to a long-term growth rate of 3%, how much is that stock worth today?

Reference no: EM133120098

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