A company has just paid $2.00 in its common stock and expects to continue paying dividends, which
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Question:
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
Financial Management Theory and Practice
ISBN: 978-1305632295
15th edition
Authors: Eugene F. Brigham, Michael C. Ehrhardt
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