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Question
Mountain Top Nursery is a relatively young firm which just paid its first annual dividend of $0.30 a share. Management projects dividend increases of 15 percent per year for five years followed by a constant growth rate of 3.0 percent annually. What is this stock worth today if the applicable discount rate is 12.5 percent?A. $3.59
B. $4.66
C. $5.23
D. $6.01
E. $6.59
Answer
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