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You are considering the purchase of Miller Manufacturing, Inc.'s common stock. The stock is selling for $21.00 per share. The next year dividend is expected
You are considering the purchase of Miller Manufacturing, Inc.'s common stock. The stock is selling for $21.00 per share. The next year dividend is expected to be $2.10, and you expect the dividend to keep growing at a constant rate. If the stocks of similar risk offer a return of 13%, what constant growth rate of dividends would make the value estimate equal to the stock price?
A.
10%
B.
3%
C.
8%
D.
5%
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