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Question

Question

You are considering the purchase of Crown Bakery, Inc. common stock that just paid a dividend of $19.59 per share. You expect

Hi all,

Thanks so much for helping me out; Please show me all of the work, as I really need to get this down!

Thanks!

Answer 1

Answer #1

Current price=D1/(Required return-Growth rate)

=(19.59*1.0104)/(0.1218-0.0104)

which is equal to

=$177.68(Approx).

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Answer 2

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