A company has just paid $2.00 in its common stock and expects to continue paying dividends, which

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A company has just paid $2.00 in its common stock and expects to continue paying dividends, which are expected to grow by 5% each year, from now to infinity. If the required rate of return for the stock is 9%, calculate the value of the stock.

The answer is 52.50 but I'm looking for an explanation on how to solve it.

Related Book For answer-question

Financial Management Theory and Practice

ISBN: 978-1305632295

15th edition

Authors: Eugene F. Brigham, Michael C. Ehrhardt

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Posted Date: May 11, 2023 05:41 AM

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A company has just paid $2.00 in its common stock and expects to continue paying dividends, which

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To calculate the value of the stock we can use the dividend discount model which is Stock Valu... View the full answer

Financial Management Theory and Practice

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