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(Six years ago ABC Corporation paid a $10 dividend and just paid a $13.40 dividend this year. Investors expect this growth rate to continue into
(Six years ago ABC Corporation paid a $10 dividend and just paid a $13.40 dividend this year. Investors expect this growth rate to continue into the foreseeable future. Your required rate of return for investments in a firm as risky as ABC Corporation is 20 percent (i) What is the value of one share of stock? (ii) If the stock is selling for $110, should you buy it? Explain.
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