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1- A company will pay a dividend of $3.14 next year. The company has stated that it will maintain a constant growth rate of 4.5
1- A company will pay a dividend of $3.14 next year. The company has stated that it will maintain a constant growth rate of 4.5 percent a year forever. If you want a return of 12 percent, how much will you pay for the stock? What if you want a return of 8 percent? What does this tell you about the relationship between the required return and the stock price? 2-If Treasury bills are currently paying 4.8 percent and the inflation rate is 2.7 percent, what is the approximate real rate of interest? The exact real rate
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