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Question
Your company paid a dividend of $2.00 last year. The growth rate is expected to be 4 percent for 1 year, 5 percent the next year, then 6 percent for the following year, and then the growth rate is expected to be a constant 7 percent thereafter. The required rate of return on equity (rs) is 10 percent. What is the current price of the common stock?
a. $53.45
b. $60.98
c. $64.49
d. $67.47
e. $69.21
Answer
This answer is hidden. It contains 174 characters.
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