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A stock is trading at $90 per share. The stock is expected to have a year-end dividend of $5 per share (D1 = $5), and
A stock is trading at $90 per share. The stock is expected to have a year-end dividend of $5 per share (D1 = $5), and it is expected to grow at some constant rate g throughout time. The stock's required rate of return is 12%. If markets are efficient, what is your forecast of g? Round the answer to three decimal places. Note: this question requires you to use the Constant Growth/Gordon Growth model and solve for the growth rate.
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