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Summit Systems will pay a dividend of $1.50 next year. Investors expect Summit's dividend to grow by 2.8% per year forever . Assume that the

Summit Systems will pay a dividend of $1.50 next year. Investors expect Summit's dividend to grow by 2.8% per yearforever. Assume that the company has a beta of 0.8, andRf= 3% andE(RM)= 9%. What should be the stock's fair value today?

Hint: the stock's dividends follow a constant growing perpetuity.

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