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Star Manufacturing is expected to pay a dividend of $3.00 per share at the end of the year (D1 = $3.00). The stock sells for

  1. Star Manufacturing is expected to pay a dividend of $3.00 per share at the end of the year (D1 = $3.00). The stock sells for $500 per share, and its required rate of return is 10%. The dividend is expected to grow at some constant rate, g, forever. What is the equilibrium expected growth rate?

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