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Answer the following questions. a. You believe that a corporation's dividends will grow 5 percent, on average, forever. If the price of the stock is
Answer the following questions. a. You believe that a corporation's dividends will grow 5 percent, on average, forever. If the price of the stock is $50, what should be its yearly dividend payment assuming a 6 percent required return? b. Suppose a firm's dividends grow at 7%, on average, into the foreseeable future. The firm's last dividend was $6. If possible, find the current price of this stock, assuming the required return is 5% using the Gordon growth model. c. The current price of a stock is $50 and you plan to sell it in two years. If dividends are expected to be $1 per share for the next two years, and the required return is 5%, what should the price of the stock be when you sell it
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