Question: Indicate whether the following statement is true or false. Provide explanation or calculation to support your answer. 5. Kudrow stock plans to pay a dividend

Indicate whether the following statement is true or false. Provide explanation or calculation to support your answer. 5. Kudrow stock plans to pay a dividend of $5 per share next year, which is expected to increase by 3 percent per year subsequently. The required rate of return is 15 percent. The value of Kudrow stock, according to the dividend discount model, is $ 41.67. Kudrow is expected to generate earnings of $3.22 per share next year. The mean ratio of share price to expected earnings of competitors in the same industry is 13. Based on the P/E model, the valuation of the firm

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