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Lance Cove Choppers Inc. is experiencing rapid growth. The company expects dividends to grow at 25 percent

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Lance Cove Choppers Inc. is experiencing rapid growth. The company expects dividends to grow at 25 percent per year for the next 11 years before leveling off at 6 percent into perpetuity. The required return on the company’s stock is 12 percent. If the dividend per share just paid was $1.74, what is the stock price?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Akshay Vartak
I have Qualified my BSc Honours in Mathematics, MSc in mathematics, B.Ed. and still pursuing PhD after qualify Pre-PhD in Fixed-Point Theory. I have experienced more than a year as a Subject Matter expert Of Advanced Mathematics and Calculus in Chegg. I have cleared CTET level-2 and state exam Htet-2 (Mathematics).
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Stocks (also known as equities) are securities that represent ownership in a company. They are issued by companies to raise capital, and when an individual buys stocks, they become a shareholder in that company. Investing in stocks can be a way for individuals to potentially earn a return on their investment through dividends and capital appreciation. However, investing in stocks also carries a level of risk, as the value of the stock can fluctuate based on various factors such as the financial performance of the company and general market conditions. For companies, issuing stocks can be a way to raise funds for growth and expansion. When a company goes public by issuing an initial public offering (IPO), it can raise significant capital by selling ownership stakes to the public. Companies can also issue additional stock offerings to raise additional capital as needed.

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