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Question
The common stock of A.G. Tailor has a required return of 16 percent. The latest press release stated that last year's dividend was $0.90 per share and that future dividends will increase by 15 percent for the following 3 years. After that, the dividend growth rate will be 3 percent indefinitely. What is one share of this stock worth to you today?A. $8.42
B. $9.60
C. $10.26
D. $10.75
E. $12.03
Answer
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