Question
Greg Inc. company stock is expected to grow at a constant rate indefinitely. The company stock is currently priced at $50 and just paid a
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Greg Inc. company stock is expected to grow at a constant rate indefinitely. The company stock is currently priced at $50 and just paid a dividend of $4. If the required rate of return is 18%, what is the constant growth rate for Greg Inc.?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To calculate the constant growth rate we can use the Gordon Growth Model formula P0 ...
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Step: 2
Step: 3
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Corporate Finance A Focused Approach
Authors: Michael C. Ehrhardt, Eugene F. Brigham
6th edition
1305637100, 978-1305637108
