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What should be the market value of its stock today

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Question - Forral Company has never paid a dividend. But the company plans to start paying dividends in two years-that is, at the end of Year 2. The first dividend is expected to equal $3 per share. The second dividend and every dividend thereafter are expected to grow at a 7 percent rate. If investors require a 12 percent rate of return to purchase Forral's common stock, what should be the market value of its stock today?

Reference no: EM133141718

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