MJ LTD Is Expected to Grow at Various Rates Over

question 78

Essay

MJ LTD is expected to grow at various rates over the next five years.The company just paid a $1.00 dividend.The company expects to grow at 20% for the next two years (effecting D₁ and D₂),then the company expects to grow at 10% for three additional years (D₃,D₄,D₅)after which the company expects to grow at a constant rate of 5% per year indefinitely.If the required rate of return on MJ's common stock is 12%,then what is a share of MJ's stock worth?

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