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Arts and Crafts, Inc., will pay a didend of $2 per share in 1 year. It sells at $40 a share and firms in the same industry pr
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Answer #1

Price=(Dividend in year 1)/(Rate of return-Growth rate)

40=2/(14%-Growth rate)
14%-Growth rate=2/40
14%-0.05=Growth rate
Expected growth rate=9.00%

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