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a. The common stock of Russel, Corp.is currently selling at $40 and investors require arate of return of 10%. Russel is expected to pay a
a.The common stock of Russel, Corp.is currently selling at $40 and investors require arate of return of 10%. Russel is expected to pay a dividend of$2. At what rate the market would expect Russel's dividends to growth?(Do not round intermediate calculations. Round your answer to 2 decimal places.)
b. What will be the price of Russel's common shares if analysts revised its dividend growth rate down to 2%?(Round your answer to 2 decimal places.)
c.After that dividend growth revision, Russel'sP/E ratio would be
- The P/E ratio will increase.
- The P/E ratio will decrease.
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