Three-step process of non-constant growth ddm

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You are planning to buy a stock that has just paid a dividend (D0) of $2.50. In addition, you anticipate the following dividend growth rates:• Year 1 = 100%• Year 2 = 0%• Year 3 = -30% (note this is NEGATIVE 30%)• Year 4 = 20%• Years 5 through infinity = 4%Assume a discount rate of 10%. Based on this, what is the value of the stock today? (Hint: use the three-step process of non-constant growth DDM). Be sure to detail your intermediate steps. thank you

Reference no: EM132389633

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