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excel Question 6 10 pts Lily and Brothers Corporation is expected to pay a dividend of $1.25 per share one year from now. The dividend
excel
Question 6 10 pts Lily and Brothers Corporation is expected to pay a dividend of $1.25 per share one year from now. The dividend of the company is expected to grow at a constant rate of 3% a year. Assume the equity cost of capital is 12%. a. According to the dividend discount model, what is the intrinsic value of a share of Lily and Brothers Inc.? Briefly show your calculations. Round to two decimal places. b. Suppose a stock of Lily and Brothers Inc. is currently selling for $40 and Steve is an investor who solely relies on the dividend discount model for his stock picking decision. Would Steve consider adding this stock to his portfolio? Briefly explain why or why notStep by Step Solution
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