Tarp Corporation is a young start-up company. No dividends will be paid over the next ten years because the ﬁrm needs to plow back its earnings to fuel growth. The company will pay $3 per share
Dividend in year 11 and will increase the dividend by 6% per year thereafter. If the required return on
This stock is 15%, what is the current share price?

Question

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The Answer of Tarp Corporation is a young start-up company. No dividends will be paid over the next ten years because the ﬁrm needs to plow back its earnings to fuel growth. The company will pay $3 per share
Dividend in year 11 and will increase the dividend by 6% per year thereafter. If the required return on
This stock is 15%, what is the current share price?

Tarp Corporation Is a Young Start-Up Company