A company has 2 million shares outstanding. It paid a dividend of $2 during the past year,

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A company has 2 million shares outstanding. It paid a dividend of $2 during the past year, and expects that dividends will grow at 6 percent annually in the future. Stockholders require a rate of return of 13 percent. What would you expect the price of each share to be today, and what is the value of the company’s common stock?

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Muhammad Salman Alvi

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