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valputin valputin
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Posts: 5754
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8 years ago
You believe that a corporation's dividends will grow 5% on average into the foreseeable future. If the company's last dividend payment was $5 what should be the current price of the stock assuming a 12% required return?
Textbook 
The Economics of Money, Banking and Financial Markets, Business School Edition

The Economics of Money, Banking and Financial Markets, Business School Edition


Edition: 4th
Author:
Read 316 times
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Our course uses > The Economics of Money, Banking and Financial Markets

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wrote...
Educator
8 years ago
Use the Gordon Growth Model.

$5(1 + .05)/(.12 - .05) = $75
valputin Author
wrote...
8 years ago
This is great!
Our course uses > The Economics of Money, Banking and Financial Markets
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