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An annual dividend per share of 0.70 at the end of 2016 growing at a 5 rate annually forever Suppose the expected required rate of
An annual dividend per share of 0.70 at the end of 2016 growing at a 5 rate annually forever Suppose the expected required rate of return on such an investment is constant at 15 Now suppose that at the end of 2016 Paychex's managers decide to pay a dividend per share of 0.85 instead of 0.70 Also suppose that the market still believes that future dividends will grow forever at an annual rate of 5. What rate of return will you end up making on your investment if you decide to sell the stock risk?
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