MST Corp is expanding rapidly and currently does not pay div…
MST Corp is expanding rapidly and currently does not pay dividends. However, investors expect MST to begin paying dividends, beginning with a dividend of $3 per year, in year 5. The dividend should grow rapidly-at a rate of 25% per year during years 6 and 7; but after year y, growth should be a constant 5% per year forever. If the required return on MST is 12%, what is the value of the stock today?
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