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9-12 VALUATION OF A CONSTANT GROWTH STOCK Investors require an 8% rate of return on Mather Companys stock (i.e., r = 8%). a.PLEASE SHOW HOW TO DO IN EXCEL

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Answer #1

The formula is D0*(1+g)/(r-g)

I am showing here for one case

For example part a)
1) for growth rate of -2%

Enter the below formula in Excel in any cell

=1.25*(1+(-2%))/(8%-(-2%))

You will get a value of 12.25


Similarly you can do for other parts

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