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Problem 11-01 The dividend-growth model may be used to value a stock: Round your answers to the nearest cent. a. What is the value
Problem 11-01 The dividend-growth model may be used to value a stock: Round your answers to the nearest cent. a. What is the value of a stock if: Do = $2.90 k = 13% g = 7% V: Do (1+ g) k-g b. What is the value of this stock if the dividend is increased to $4.90 and the other variables remain constant? c. What is the value of this stock if the required return declines to 11 percent and the other variables remain constant? $ d. What is the value of this stock if the growth rate declines to 4 percent and the other variables remain constant? e. What is the value of this stock if the dividend is increased to $3.70, the growth rate declines to 4 percent, and the required return remains 13 percent?
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