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Suppose that the IHOP Corp..... Suppose that the IHOP Corp., the International House of Pancakes restaurant company, will pay a $1.00 per share dividend over
Suppose that the IHOP Corp..... Suppose that the IHOP Corp., the International House of Pancakes restaurant company, will pay a $1.00 per share dividend over the next year. If investors require an 11% annual return from investments such as this one, and the future rate of growth in dividends is expected to rise from the company's historical rate of 5% annually, what will happen to the stock price today? Multiple Choice The stock price will fall. O The stock price will rise. The company's dividend will be cut today. Nothing, since the expected future growth of dividends does not affect the stock price today
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