Constant growth
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67. The Robert Phillips Co. currently pays no dividend. The company is anticipating dividends of $0, $0, $0, $.10, $.20, and $.30 over the next 6 years, respectively. After that, the company anticipates increasing the dividend by 4% annually. The first step in computing the value of this stock today, is to compute the value of the stock when it reaches constant growth in year:
A. 3
B. 4
C. 5
D. 6
E. 7.
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Constant growth and value of stock is assessed in the solution.
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The Robert Phillips Co. currently pays no dividend. The company is anticipating dividends of $0, $0, $0, $.10, ...
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