Common Stock Valuation EXes & O Company's (EOC) common stock paid RM2.00 dividend in 2020. The investor's required rate of return on EOC is 14% and that dividends will grow at the rate of 5% per year for the foreseeable future.

1) The price of the common stock in 2021 is expected to be RM

2) The stock is currently traded for RM24.20. How much is the investor's rate of return?

3) Based on your answer in question 2, The investor should buy EOC's stock at RM24.20.

True

False