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Below are the three possible stock investment each having a constant growth in its dividends. Stocks Expected dividend next year Dividend Growth Rate Required Return
Below are the three possible stock investment each having a constant growth in its dividends.
| Stocks | Expected dividend next year | Dividend Growth Rate | Required Return | Current Stock Price |
| Iron Corp | $1.20 | 8% | 13% | $22.50 |
| Thor Corp | 0.65 | 10 | 14 | 17.50 |
1. Determine the value of each firm.
2. Which stocks would you recommend as a buy? Explain your reason why?
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Understanding Housing Finance
Authors: Peter King
2nd Edition
0415432952, 978-0415432955
