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The Kelvin Company paid an annual dividend of $1.50 recently, and is expected to grow at 7% into the indefinite future. Short-term treasury bills are
The Kelvin Company paid an annual dividend of $1.50 recently, and is expected to grow at 7% into the indefinite future. Short-term treasury bills are currently yielding 6%, and an average stock yields its owner 10%. Kelvin stock is relatively volatile. Its return tends to move in response to political and economic changes about twice as much as does the return on the average stock. What should Kelvin sell for today
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