ABC Corporation has a stock price P 0 = 50. The firm has just paid a dividend

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ABC Corporation has a stock price P0 = 50. The firm has just paid a dividend of $3 per share, and intelligent shareholders think that this dividend will grow by a rate of 5 percent per year. Use the Gordon dividend model to calculate the cost of equity of ABC.

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Financial Modeling

ISBN: 9780262026284

3rd Edition

Authors: Simon Benninga

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