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Question 1: Sweet Candy will pay a dividend of $0.72 next year. The CEO of the company declared that the company will maintain a constant
Question 1: Sweet Candy will pay a dividend of $0.72 next year. The CEO of the company declared that the company will maintain a constant growth rate of 7% per year every year from now on. a. How much will you pay for the stock if your required return is 10% ? b. How much will you pay for the stock if your required return is 8% ? c. Based on your answer in parts a and b, give one disadvantage of the constant growth model
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