Question
You and a portfolio manager and use constant growth DDM to calculate stock value. In a non-inflationary environment, North Shore Tool Supplies Company is expected
You and a portfolio manager and use constant growth DDM to calculate stock value. In a non-inflationary environment, North Shore Tool Supplies Company is expected to pay a dividend of $1.40 in the coming year, the growth rate of dividends is expected to be 0%, and the required return on the stock will be 8%. If the inflation rate is 4%, North Shore Tool Supplies Company is expected to pay a dividend of $1.46 in the coming year, the dividend growth rate will be 4%, and the required return on the stock will be 12.32%. In the inflationary environment with inflation at 4%, a share of North Shore Tool Supplies Companys stock should be?
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