Suppose you are thinking about buying a stock that currently pays out $10 per year in dividends.

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Suppose you are thinking about buying a stock that currently pays out $10 per year in dividends. You expect these dividends to grow at a rate of 2% per year in the future.

What is the fair price of a share of this stock if you discount future cash flows at a rate of 5% per year

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Fundamentals of Corporate Finance

ISBN: 978-0132148238

2nd edition

Authors: Berk, DeMarzo, Harford

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Posted Date: Mar 06, 2023 12:25 AM

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Suppose you are thinking about buying a stock that currently pays out $10 per year in dividends.

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Fundamentals of Corporate Finance

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