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1. a) Exelon Corporation had earnings per share of $2.95 in 2015 and a dividend payout ratio of 35%. If dividends are expected to grow
1.
a) Exelon Corporation had earnings per share of $2.95 in 2015 and a dividend payout ratio of 35%. If dividends are expected to grow at 5% in 2016, beta is 0.75, Treasury Bill rate is 6% and market risk premium is 5.5%, how much should an investor pay for the stock?
b) The annual dividend expected to be paid by Google on its common stock is $1.50. The required rate of return for the stock is 6%. If the stock is currently selling at $78 per share, what is the growth rate?
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