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What price per share would you expect to pay

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Question - A tech start-up company grows very rapidly, causing it to initially reinvest all earnings in new growth. Assume that four years from today, this company pays a dividend of $3.00 per share, which is expected to grow at 5% per year for ever. If investors require a 17% return to hold the common stock, what price per share would you expect to pay?

a. $24.25

b. $12.41

c. $22.35

d. $15.61

Reference no: EM133039671

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