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Franklin Corporation is expected to pay a dividend of $1.30 per share at the end of the year, i.e., (D1 = $1.30). The stock currently
Franklin Corporation is expected to pay a dividend of $1.30 per share at the end of the year, i.e., (D1 = $1.30). The stock currently sells for $32.50 per share, and its required rate of return is 10.5%. The dividend is expected to grow at some constant rate, g, forever. Approximately, what is the equilibrium expected growth rate given the above information? (i.e., solve for g using constant DDM). 5.00% 5.50% 6.00% 6.50% 7.00%
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