Question: Investors anticipate that Sweetwater Manufacturing Inc s next dividend due in
Investors anticipate that Sweetwater Manufacturing Inc.’s next dividend, due in one year, will be $4 per share. Investors also expect earnings to grow at 5% in perpetuity, and they require a return of 10% on their shares. Use the Gordon growth model (see Equation 5.4) to calculate Sweetwater’s stock price today.
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