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( Common stock valuation ) The common stock of NCP paid $1.35 in dividends last year. Dividends are expected to grow at an annual rate

(Common stock valuation) The common stock of NCP paid $1.35 in dividends last year. Dividends are expected to grow at an annual rate of 5.40 percent for an indefinite number of years.

a. IfNCP's current market price is $21.27 pershare, what is thestock's expected rate ofreturn?

b. If your required rate of return is 7.4 percent, what is the value of the stock foryou?

c. Should you make theinvestment?

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