Hurricane Corporation expects to grow its dividend by 5% per year. The current dividend is $2 per
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Question:
Hurricane Corporation expects to grow its dividend by 5% per year. The current dividend is $2 per share. The required return is 8%.
- What is the estimated value of a share of common stock?
- If price is $40 and dividends were $1.50 per share but expected to grow at 4% per year, what would be the required rate of return?
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