Question: Question content area top Part 1 Assume Evco, Inc. has a current stock price of $47.01 and will pay a $2.00 dividend in one year;

Question content area top

Part 1

Assume Evco, Inc. has a current stock price of

$47.01

and will pay a

$2.00

dividend in one year; its equity cost of capital is

13%.

What price must you expect Evco stock to sell for immediately after the firm pays the dividend in one year to justify its current price?

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