Listed below are three possible stock investments each having a constant growth in its dividends. Stocks Expected
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Question:
Listed below are three possible stock investments each having a constant growth in its dividends.
Stocks | Expected dividend next year | Dividend Growth Rate | Required return | Current stock price |
Iron Corp | $1.20 | 8% | 13% | $22.50 |
Thor Corp | 0.65 | 10 | 14 | 17.50 |
Determine the value of each firm.
Which stocks would you recommend as a buy? Explain your reason why?
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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