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Company X has 100 shares outstanding. It earns $1,000 per year and expects to payout 60% as dividends and use the remaining to buyback stock
Company X has 100 shares outstanding. It earns $1,000 per year and expects to payout 60% as dividends and use the remaining to buyback stock (every shareholder receive the dividend, stock repurshase occurs after that). Assuming that the firm will maintain this policy forever, calculate the value of the second dividend. (The required rate of return is 10 percent.)
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