Spring 23 Corporation is a start-up business that will not be able to pay dividends...
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Spring 23 Corporation is a start-up business that will not be able to pay dividends for the next three years. However, in four years its anticipated that the company will be able to pay a dividend of $0.70 per share, with that dividend growing to $1.50 the next year. After that $1.50 dividend it is believed that dividends will grow at an annual rate of 4% indefinitely. The Market needs a 13% return to justify the risks of this equity investment. Estimate the stock price as of today. [Do not round interim calculations]
A. $9.57
B. $10.65
C. $12.03
D. $11.34
E. None of the above
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