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You are thinking about investing in stock in a company that paid a dividend of $10 this year and whose dividends you expect will grow
You are thinking about investing in stock in a company that paid a dividend of $10 this year and whose dividends you expect will grow at 4 percent a year. The risk-free rate is 3 percent and you require a risk premium of 5 percent. If the price of the stock in the market is $200 a share, should you buy it?
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