You are thinking about investing in stock in a company who paid a dividend of $10 this
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Question:
You are thinking about investing in stock in a company who paid a dividend of $10 this year and whose dividends you expect to grow at 4 percent a year. The risk-free rate is 3 percent and you require a risk premium of 3 percent. If the price of the stock in the market is $200 a share, should you buy it? (Click to select) No Yes , using the dividend-discount model, you are willing to pay up to (Click to select) $520 $240 $180 per share.
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