a) This question requires application of constant growth dividend discount model, according to which
Div1 = $0.80
b) This requires application of basic time value of money formula, according to which
FV = PV * (1 + r)n
FV = 2* PV
2 * PV = PV * (1 + r)n
2 = (1 + 0.16)n
Taking log of both sides,
LN(2) = n * LN(1.16)
0.6931 = n * 0.14842
n = 4.67 years
4 (4) An issue of common stock pays a dividend which grows at a rate of...
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