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Buyback Stock 0/1 pts Correct Question 13 Today a firm paid $2/share in Dividends. Going forward, it will increase the divide

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Answer #1

This question requires application of constant growth dividend discount model according to which: Po - Divi T-9 Po = Price of

Div1 = Div0 * (1 + g)

Div1 = $2 * (1 + 5%) = $2.10

2.10 Po o 12 -0.05

Po = 30.00

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