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A firm will pay a dividend of $3.47 next year. The dividend is expected to grow...

A firm will pay a dividend of $3.47 next year. The dividend is expected to grow at a constant rate of 3.17% forever and the required rate of return is 13.18%. What is the value of the stock?

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Answer #1

Current price=D1/(Required return-Growth rate)

=3.47/(0.1318-0.0317)

which is equal to

=$34.67(Approx).

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