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required return 10% Present dividend $1 Growth rate 5% a) What is the value of the stock? b) If the growth rate increases to 6
required return 10% Present dividend $1 Growth rate 5% a) What is the value of the stock? b) If the growth rate increases to 6 percent and the dividend remains $1, what is the value of the stock? c) If the required return declines to 9 percent and the dividend remains $1, what is the value of the stock? If the stock is selling for $20, what does that imply?
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