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Question 2 Company XYZ just paid a dividend of $ 2 per share. The dividend is expected to grow at a constant rate of 5
Question Company XYZ just paid a dividend of $ per share. The dividend is expected
to grow at a constant rate of per year indefinitely. If the required rate of return for
investors is what is the current value of the stock using the Gordon Growth Model?
Question Based on Question suppose that company XYZ declares that its new Eu
ropean plant is under construction and will increase the company's sales growth in years.
You therefore revise your expectation about XYZs dividend growth rate. That is it will be
annually starting from What is the new current value of the stock?
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