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A stock just paid a dividend of $4.10. If the dividends are expected to grow at...

A stock just paid a dividend of $4.10. If the dividends are expected to grow at 5% forever and the required return is 15%, what is the stock's current price? (Enter only numbers and decimals in your response. Round to 2 decimal places.)

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Answer #1

P0 = [D0 x (1 + g)] / [r - g]

= [$4.10 x 1.05] / [0.15 - 0.05] = $4.305 / 0.10 = $43.05

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