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a) Dora Inc.'s stock has a required rate of return of 12%, and it sells for $87.50 per share. The dividend is expected to grow
a) Dora Inc.'s stock has a required rate of return of 12%, and it sells for $87.50 per share. The dividend is expected to grow at a constant rate of 6.00% per year. What is the expected year-end dividend, D 1?
a. | $1.57 | |
b. | $2.48 | |
c. | $5.25 | |
d. | $7.92 | |
e. | $4.74 |
b) Ackert Company's last dividend was $3.00. The dividend growth rate is expected to be constant at 1.5% for 2 years, after which dividends are expected to grow at a rate of 8.0% forever. The firm's required return (r s) is 12.0%. What is the best estimate of the current stock price?
a. | $88.03 | |
b. | $78.37 | |
c. | $91.22 | |
d. | $85.79 | |
e. | $71.71 |
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