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5. Constant growth stocks Aa Aa SCI just paid a dividend (Do) of $2.16 per share, and its annual dividend is expected to grow at
5. Constant growth stocks Aa Aa SCI just paid a dividend (Do) of $2.16 per share, and its annual dividend is expected to grow at a constant rate (g) of 4.50% per year. If the required return (rs) on SCI's stock is 11.25%, then the intrinsic value of SCI's shares is per share. Which of the following statements is true about the constant growth model? O When using a constant growth model to analyze a stock, if an increase in the growth rate occurs while the required return remains the same, this will lead to an increased value of the stock O When using a constant growth model to analyze a stock, if an increase in the growth rate occurs while the required return remains the same, this will lead to a decreased value of the stock
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