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Plastic Pretzels stock recently paid a dividend of $ 1 . 2 3 per share. The dividend growth rate is expected to be 5 .
Plastic Pretzels stock recently paid a dividend of $ per share. The dividend growth rate is expected to be indefinitely. Stockholders require a return of on this stock.
Required:
a What is the current intrinsic value of Plastic Pretzels stock? Do not round intermediate calculations. Round your answer to decimal places.
b What would you expect the price of this stock to be in one year if its current price is equal to its intrinsic value? Do not round intermediate calculations. Round your answer to decimal places.
c If you were to buy Plastic Pretzels stock now and sell it after receiving the dividend one year from now, what would be your holding period return HPRDo not round intermediate calculations. Round your answer to decimal places. Indicate negative values with a minus sign.
d If you are able to purchase the stock for $ instead of its intrinsic value today, what would be the holding period return? Do not round intermediate calculations. Round your answer to decimal places. Indicate negative values with a minus sign.
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