What is the value of the stock today

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Question - Mill Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect MJ to begin paying dividends, beginning with of $.75 coming 3years from today. The dividend should grow rapidly- at a rate of 35% per year- during years 4 and 5, but after year 5, growth should be a constant 7% per year. If the required return on MJ 13%, what is the value of the stock today?

Reference no: EM132747155

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