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samualson samualson
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5 years ago
LED Corp.'s common stock paid $2.50 in dividends last year (D0). Dividends are expected to grow at a 12-percent annual rate forever. If LED's current market price is $40.00, and your required rate of return is 23 percent, should you purchase the stock?
A) No, the percentage return on the stock is too high, thus it is too risky.
B) Yes, the stock is expected to return more than you require.
C) No, the stock is overpriced.
D) Not enough information is given.
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Marc18Marc18
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5 years ago
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samualson Author
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#2
5 years ago
This is very helpful, my teacher this year is not good
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