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The Company expects to announce their annual dividend of $3.92 next year. The company promises to increase its dividends at 4% perpetually. You make an
The Company expects to announce their annual dividend of $3.92 next year. The company promises to increase its dividends at 4% perpetually. You make an offer to purchase the stock so that you earn 13.4%. You expect to receive the dividend and immediately sell the stock after one year when interest rates decrease to 12%. How much would have been your annual rate of return from the one-year investment?
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