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You are considering investing in a common stock. You will receive a payment of $100 one year from today from the stock. You will continue
You are considering investing in a common stock. You will receive a payment of $100 one year from today from the stock. You will continue to receive payments from the stock each year forever, but the payments will become 10 percent larger in each successive year. The current ratio of the company is 1.4. You require a 15 percent rate of return on this type of investment. Using a dividend valuation model, how much is the most you should be willing to pay to buy a share of this stock? A. $2,200 B. $2,000 C. $2,800 D. $1,000 E. Something Else
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