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Liverpool plc is expected to pay a dividend of 5 at the end of next year (i.e., at t=1). Dividends are annual and are expected
Liverpool plc is expected to pay a dividend of 5 at the end of next year (i.e., at t=1). Dividends are annual and are expected to grow at a constant growth rate forever afterwards. The current share price is 100. Assuming that shareholders of Liverpool plc.require a rate of return equal to 6.5% per year, what future dividend growth rate would be necessary to make the current share price equal to the fair value of Liverpool ple? O 1.0% O 1.5% O 2.0% O 2.5% Question 14 Which of the following statements is FALSE? Beta corresponds to the slope of the best fitting line in the plot of the securities excess returns versus the market excess return. The statistical technique that identifies the best-fitting line through a set of points is called linear regression. Securities that tend to move more than the market have betas higher than 0. Securities whose returns tend to move in tandem with the market on average have a beta of 1
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