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3. Based on question 2. If the company has market value of debt and preferred stock of $1 million and 1 million shares outstanding,
3. Based on question 2. If the company has market value of debt and preferred stock of $1 million and 1 million shares outstanding, what is the stock price of the company? 4. If Do = $2.25, growth (which is constant) = 10%, and Po = $75 a. What is the stock's expected dividend yield for the coming year? b. If the required rate of return is 13.50%, what is the stock price of the stock? What would you recommend for investment strategy?
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