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A firm reported that it paid dividends of $0.70 a share this year. A financial analyst has determined that the firms growth rate in dividends
A firm reported that it paid dividends of $0.70 a share this year. A financial analyst has determined that the firms growth rate in dividends will continue at its historical rate of 8% a year indefinitely and has estimated that an investorshould require a 20% return on the firmsstock, based on itsriskiness. What is the fair market price of the stock that is implied by his estimates?
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