Question
Hero firm just paid $1 dividend. Analysts are predicting that the firm will pay $1 in a year, $2 in two years and $3 in
"Hero" firm just paid $1 dividend. Analysts are predicting that the firm will pay $1 in a year, $2 in two years and $3 in three years from today. After that, the growth rate will be 6% a year forever. Assuming that the market price of the firm is $50, what is the required rate of return?
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Systems Analysis and Design
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