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An investor purchased a holding of common stock two months before payment of the next dividend was due. Dividends are paid annually and it is
An investor purchased a holding of common stock two months before payment of the next dividend was due. Dividends are paid annually and it is expected that the next dividend will be an amount of 12 per share. The investor anticipates that dividends will grow at a rate of 4% per annum in perpetuity. Calculate the price per share that the investor should pay to obtain a return of 7% per annum effective.
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