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ABC Co. is expected to pay $12.00 per share in dividends at the end of the year. If investors expect the dividends to continue growing
ABC Co. is expected to pay $12.00 per share in dividends at the end of the year. If investors expect the dividends to continue growing at the rate of 5% per year forever, and the required rate of return is 15%, calculate the intrinsic value of ABC's stock. a. $100 b. $10.50 c. $116.66 d. $120 ABC common stock is expected to earn $4.00 per share next year, and pay $2.00 per share in dividends. If the expected growth rate in dividends is 6% and the required rate of return is 16%, the P/E ratio is: a. 6 b. 10 c. 50 d. 5
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