Stephens Supply Company (SSC) is growing rapidly. SSC currently pays no dividend, but expects to pay...

Stephens Supply Company (SSC) is growing rapidly. SSC currently pays no dividend, but expects to pay its first dividend two years from today. SSC expects to maintain its current growth rate of 25% annually for the next three years (1 year after beginning to pay dividends), after which SSC expects the growth rate to decrease to 5% annually. If the appropriate discount rate is 12%, then what is the amount of the first dividend that SSC expects to pay? Assume $ 60 price (**need step by step process from start to finish (in excel if possible))

Expert Solution

Amount of the first dividend that SSC expects to pay is $2.94

jeff jeffy answered 2 years ago

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