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Common stock valuation Peter Brothers Inc. is expected to pay a $ 0 . 5 0 per share dividend at the end of the year.
Common stock valuation
Peter Brothers Inc. is expected to pay a $ per share dividend at the end of the year. The dividend is expected to grow at a constant rate of a year. The required rate of return on the stock is
a What is the value per share of the company\'s stock?
b Also estimate the dividend yield
c Estimate the capital gains yield over the first year.
d How much would you have to pay today if you buy now and sell in years?
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There are 3 Steps involved in it
Step: 1
To calculate the value per share of the companys stock we can use the Gordon Growth Model also known ...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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