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Suppose you expect Longs Drug Stores to pay an annual dividend of $0.56 per share in the coming year and to trade $45.50 per share

Suppose you expect Longs Drug Stores to pay an annual dividend of $0.56 per share in the coming year and to trade $45.50 per share at the end of the year. If investments with equivalent risk to Longs’ stock have an expected return of 6.80%, what is the most you would pay today for Longs’ stock?

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