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German Resources is involved in coal mining. The company is currently profitable and is expected to pay a dividend of 4 per share next year.
German Resources is involved in coal mining. The company is currently profitable and is expected to pay a dividend of 4 per share next year. The company has suspended exploration, however, and because its current mature operations exhaust the existing mines, you expect that the dividends paid by the company will decline forever at an 8 percent rate. The required return on German Resources stock is 11 percent. Using the DDM, estimate the value of the stock.
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