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You are considering purchasing the stock of Arnold Incorporated stock which is expected to pay adividend of $5. The stock is currently selling for $60and
You are considering purchasing the stock of Arnold Incorporated stock which is expected to pay adividend of $5. The stock is currently selling for $60and is expected to have dividend growth of 4% based on its past revenue growth. Currently, the S&P is returning an average of 10% which results in a required return for this stock of 13%. How much should you pay for this stock.
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