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You are considering investing in a common stock. The stock is expected to pay a dividend of $40, one year from today. If you buy
You are considering investing in a common stock. The stock is expected to pay a dividend of $40, one year from today. If you buy the stock the dividends will continue forever, but the payments will become 10 percent larger each successive year. You require a 12 percent rate of return on this type of investment. How much is the most you should be willing to pay to buy a share of this stock? O A. $200 B. $20 OC. $40 OD. $2,000 O E. $20,000
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