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A firm pays a $1.60 dividend at the end of year one. It has a share price of $50 (P0) and a constant growth rate
A firm pays a $1.60 dividend at the end of year one. It has a share price of $50 (P0) and a constant growth rate (g) of 10 percent. a. Compute the required (expected) rate of return (Ke). (Do not round intermediate calculations. Round the final answer to 2 decimal places.)
Required rate of return ?%
Also indicate whether each of the following changes would make the required rate of return (Ke) go up or down. (In each question below, assume only one variable changes at a time. No actual numbers are necessary.)
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