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Question 1 7 marks, 11 minutes LOL Company has a required rate of return of 7%. They are considering an investment in common shares. The
Question 1 7 marks, 11 minutes LOL Company has a required rate of return of 7%. They are considering an investment in common shares. The shares pay dividends of $4.00 per share. How much should LOL pay for the share? Lincoln Thomas believes that the Harris Group will pay a dividend of $4 on its common stock in year 2. Thereafter, you expect dividends to grow at a rate of 12 percent a year in perpetuity. If Lincoln requires a return of 24 percent on his investment, how much should he be willing to pay for the stock
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