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A stock expects to pay a year-end dividend of $2.00 a share (Gi.e, Di $2.00). The dividend is expected to grow 5 percent a year,
A stock expects to pay a year-end dividend of $2.00 a share (Gi.e, Di $2.00). The dividend is expected to grow 5 percent a year, forever (i.e., g-5%). The company's expected and required rate of return is 12 percent. Which of the following statements is most correct? The company's stock price is $18. The company's dividend in 5 years (Ds) is expected to be $2.43. The company's stock price 5 years from now is expected to be $26.47 Both answers b and c are correct. All of the above answers are correct
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