Question: 1 suppose the company is expected to pay a divided...
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1. Suppose the company is expected to pay a divided of $2.5 and the required rate of return is 10% and the growth rate is 4%. What is the price of the stock after 5 years? after 10 years? after 12 years?
2. Suppose the company just paid a divided of $2.5 and the required rate of return is 10% and the growth rate is 4%. What is the price of the stock after 5 years? after 10 years? after 12 years?
3. ABC’s stock is currently selling for $60 per share. The firm is expected to pay a dividend of $3.60. If the cost of equity is 9%, compute the growth rate.
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