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A firm has a current price of $40 a share, an expected growth rate of 13 percent and expected dividend per share (D1) of $2.

A firm has a current price of $40 a share, an expected growth rate of 13 percent and expected dividend per share (D1) of $2. Given its risk you have a required rate of return for it of 12 percent. Your expected rate of return and investment decision is as follows

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