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Company a's stock price increased 2% and paid an annual dividend of $1.00, the same as...

Company a's stock price increased 2% and paid an annual dividend of $1.00, the same as last year. Assuming a 5% required rate of return, what is the price of the stock?

20

34

53

106

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Answer #1

Current stock price DO*(1+g)/(Ke-g) 1*(1+0.02)/(0.05-0.02) 34.00 last year Dividend Required rate Growth rate $

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