Consider a firm that had been priced using a 10 percent growth rate and a 12 percent

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Consider a firm that had been priced using a 10 percent growth rate and a 12 percent required return. The firm recently paid a $1.20 dividend. The firm has just announced that because of a new joint venture, it will likely grow at a 10.5 percent rate. How much should the stock price change (in dollars and percentage)?

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Finance Applications and Theory

ISBN: 978-0077861681

3rd edition

Authors: Marcia Cornett, Troy Adair

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