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Suppose a stock just paid a $1 dividend last year. That dividend is expected to grow by 2% perpetually. If the firms cost of equity

Suppose a stock just paid a $1 dividend last year. That dividend is expected to grow by 2% perpetually. If the firms cost of equity capital is 12%, what should be the price of its stock?

Select one:

a. $10.00

b. $8.33

c. $8.50

d. $10.20

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