Suppose Smithfield Foods, Inc., has just paid a dividend of ($1.40) per share. Sales and profits for

Question:

Suppose Smithfield Foods, Inc., has just paid a dividend of $$1.40$ per share. Sales and profits for Smithfield Foods are expected to grow at a rate of 5% per year. Its dividend is expected to grow by the same rate. If the required return is 10%, what is the value of a share of Smithfield Foods?

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