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1. Common Stock Valuation a) What is the value of a stock that is expected to pay a constant dividend of $2 per year if
1. Common Stock Valuation a) What is the value of a stock that is expected to pay a constant dividend of $2 per year if the required return is 15%? b) A company's next expected annual dividend is $2, and the growth rate is 6%. If the required rate of return on this stock were 12%, what would the stock price be? c) Suppose a firm is expected to increase dividends by 20% in one year and by 15% in two years. After that, dividends will increase at a rate of 5% per year indefinitely. If the last dividend was $1 and the required return is 20%, what is the price of the stock
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