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a. El Caribe Ltd. expects to pay an annual dividend of $2.50 per share, and stock analysts expect the dividend to grow by 9% indefinitely.
a. El Caribe Ltd. expects to pay an annual dividend of $2.50 per share, and stock analysts expect the dividend to grow by 9% indefinitely. If El Caribe Ltd.'s current share price is $42, what would be the required rate of return? b. West-line Ltd. just went public. As a growing firm, it is not expected to pay a dividend for the first five years. After that, investors expect West-line to pay an annual dividend $1.00 per share (i.e., DE 1.00), with no growth. If the required return is 10%, what is the current stock price? C. A start-up technology company has projected earnings per share of $6.50. If the average technology industry PE ratio is 44, what would the company's projected stock price be? Show ALL workings
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