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XYZ company's common stock paid $2.50 in dividends last year. Dividends are expected to grow at a 12-percent annual rate forever. If XYZ's current market
XYZ company's common stock paid $2.50 in dividends last year. Dividends are expected to grow at a 12-percent annual rate forever. If XYZ's current market price is $40.00, and your required rate of return is 18 percent, should you purchase the stock?
No, the percentage return on the stock is too high, thus it is too risky. | ||
Yes, the stock is expected to return more than you require. | ||
No, the stock is overvalued | ||
Not enough information is given. I will rate you if you show work, thank you and please i need it asap : ) |
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