You are given the following data: Required return ................10% Present dividend .................$1 Growth rate ......................5% a) What

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You are given the following data:
Required return ................10%
Present dividend .................$1
Growth rate ......................5%
a) What is the value of the stock?
b) If the growth rate increases to 6 percent and the dividend remains $1, what is the value of the stock?
c) If the required return declines to 9 percent and the dividend remains $1, what is the value of the stock? If the stock is selling for $20, what does that imply?
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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