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Troy is interested in buying a particular stock that just paid an annual dividend per share of $1.75. Troy estimates that this current dividend will
Troy is interested in buying a particular stock that just paid an annual dividend per share of $1.75. Troy estimates that this current dividend will grow at the rate of 4% per year next year and that all future dividends will continue to grow at this same rate forever. Given this information, which of the following comes closest to an estimate of the stock's price per share if the required rate of return is 8%? A. $22.75 B. $21.03 C. $43.75 D. $45.50 E. $21.88
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