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MRU Corp. has recently paid a dividend of $5 per share. The dividends are expected to grow by 10% per year for next two years
MRU Corp. has recently paid a dividend of $5 per share. The dividends are expected to grow by 10% per year for next two years (i.e. till Year 2). After that, the dividends are expected to grow at a rate of 3% per year indefinitely. The investors require an 8% return on this stock. The stock is currently trading at $105. Is the stock correctly priced? Points: 8
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