D6=2
Value after year 6=(D6*Growth rate)/(Required return-Growth rate)
=(2*1.08)/(0.12-0.08)
=54
Hence current price=Future dividend and value*Present value of discounting factor(rate%,time period)
=2/1.12^6+54/1.12^6
=$28.37(Approx).
2. A firm currently does not pay a dividend. However, beginning in year six it is...
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