Common stock value-Variable growth Lawrence Industries' most recent annual dividend was \( \$ 2.38 \) per share ( \( \mathrm{D}_{0}=\$ 2.38 \) ), and the firm's required return is \( 15 \% \). Find the market value of Lawrence's shares when dividends are expected to grow at \( 25 \% \) annually for 3 years, followed by a \( 6 \% \) constant annual growth rate in years 4 to infinity. The market value of Lawrence's shares is \( \$ \) \( \square \) . (Round to the nearest cent.)
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38\)) and the growth rate of 25%. \[ D_1 = D_0 \times (1 + g_1) = 2.38 \times 1.25 = 2.975 \] \[ D_2 = D_1 \times (1 + g_1) = 2.975 \times 1.25 = 3.71875 \] \[ D_3 = D_2 \times (1 + g_1) = 3.71875 \times 1.25 = 4.6484375 \] Show more…
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