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Question 22 Magnetek Corp has just paid a dividend of $2 per share and you are now considering purchasing this stock. Analysts have estimated that

Question 22

Magnetek Corp has just paid a dividend of $2 per share and you are now considering purchasing this stock. Analysts have estimated that Magnetek's dividend will grow at 4% per year in perpetuity. Given the riskiness of Magnetek stock, shareholders' required rate of return is 9%. What should you be willing to pay for Magnetek stock?

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