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What should be the value of the stock today

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Reference no: EM131983426

ABC company is a small rapidly growing firm that currently does not pay a dividend. However, it is expected to pay a dividend of $3.00 at the end of the third year and this dividend is expected to grow rapidly at 40 percent for the following two years, after which the dividends will grow at 5% indefinitely. If the required rate of return for the stock 11%, what should be the value of the stock today?

Reference no: EM131983426

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