XYZ companys stock has a dividend yield of 4%. Employing the Gordon Growth Model, what is the

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XYZ company’s stock has a dividend yield of 4%. Employing the Gordon Growth Model, what is the stock’s implied growth rate if the relevant interest rate is 3% with a 8% risk premium?

Beta is not provided. The answer should be 7%.

Any clue how to derive the answer of 7%?

Related Book For answer-question

Financial management theory and practice

ISBN: 978-1439078099

13th edition

Authors: Eugene F. Brigham and Michael C. Ehrhardt

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Posted Date: Feb 26, 2024 06:42 AM

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XYZ companys stock has a dividend yield of 4%. Employing the Gordon Growth Model, what is the

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The answer of 7 for the implied growth rate is incorrect when using th... View the full answer

Financial management theory and practice

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