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Can you provide me with the solution please? Question 4 An analyst is analyzing a company whose shares are currently selling for 30 and have
Can you provide me with the solution please?
Question 4 An analyst is analyzing a company whose shares are currently selling for 30 and have paid a dividend of 2 per share for the most recent year. The following information is given: The risk-free rate is 3 percent The shares have an estimated beta of 1.5 The equity risk premium is estimated at 4 percent Based on the above information, determine the constant dividend growth rate that would be required to justify the market price of 30. A. 2.23% B. 2.25% C. 2.15% D. 2.19%Step by Step Solution
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