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Computer stocks currently provide an expected rate of return of 10%. MBI, a large computer company, will pay a year-end dividend of $2 per share.
Computer stocks currently provide an expected rate of return of 10%. MBI, a large computer company, will pay a year-end dividend of $2 per share. If the stock is selling at S40 per share, what must be the market's expectation of the growth rate of MBI dividends? (Do not round intermediate calculations. Round your answer to 2 decimal places.) If dividend growth forecasts for MBI are revised downward to 2% per year, what will be the price of the MBI stock? (Round your answer to 2 decimal places.)
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