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Q:R&D Technology Corporation has just paid a dividend of $0.50 per share . The dividends are...

Q:R&D Technology Corporation has just paid a dividend of $0.50 per share . The dividends are expected to grow at 24% per year for the next two years and at 8% per year thereafter. If the required rate of return in the stock is 16% (APR), calculate the current value of the stock. a.

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Answer #1

The current value of the stock is the present value of future dividends

The current value of the stock = $8.82

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