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A company just paid $2 dividend and the dividend is expected to grow at a constant rate of 10%. Current stock price is $100. If
A company just paid $2 dividend and the dividend is expected to grow at a constant rate of 10%. Current stock price is $100. If the required rate of return is 13%, which is likely to happen next?
a.Stock price will decrease and the expected return will decrease.
b.Stock price will decrease and the expected return will increase.
c.Stock price will increase and the expected return will increase.
d.Stock price will increase and the expected return will decrease.
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