Question 3 10 pts A stock pays annual, fixed dividends of $21 forever. Assuming a required...

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business finance

Answer 1

Answer #1

HERE, dividend is constant and perpetual. growth rate = 0%

S0 required rate of return = dividend/ price + growth rate

required rate of return = 0.07 = 21/price + 0%

price = 21/0.07

price = 21/0.07 = 300

Answer : 300.00 (Thumbs up please)

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Answer 2

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