Business, 15.04.2020 02:03, genyjoannerubiera

Hi-Tek is a young start-up company. No dividends will be paid on the stock over the next 9 years, because the firm needs to plow back its earnings to fuel growth. The company plans to pay a $6 per share dividend in 10 years (that is, at t = 10) and will increase the dividend by 4 percent per year thereafter. What is the current share price if the required return on this stock is 14 percent?

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Hi-Tek is a young start-up company. No dividends will be paid on the stock over the next 9 years, be...