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Michael Jones is interested in buying the stock of First National Bank. While the bank's management expects no growth in the near future, Michael is
Michael Jones is interested in buying the stock of First National Bank. While the bank's management expects no growth in the near future, Michael is attracted by the dividend income. Last year the bank paid a dividend of $5.78. If Michael requires a return of 12.5 percent on such stocks, what is the maximum price he should be willing to pay for a share of the banks stock?
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