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A companys stock is currently selling for $125 per share. The company has just paid a dividend of $4.25 per share. Investors expect this dividend
- A companys stock is currently selling for $125 per share. The company has just paid a dividend of $4.25 per share. Investors expect this dividend to grow at the rate of 6% per year for the next 7 years and at a rate of 4% per year thereafter.
- Calculate the cost of equity for this company.
- Calculate, using either Goal Seek or Solver, a current stock price that would yield a cost of equity of 9%.
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