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Question
Widji Outfitters is expected to pay a dividend (D1) of $1.00 next year, with an expected constant growth in dividends of 5%. The required rate of return is 11%.a) Calculate the present value of this stock.
b) What will be the new price of this stock if the discount rate rises to 12%?
c) What will be the new price of this stock if the discount rate falls to 10%?
Answer
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