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Calculate the expected price of the firms stock

Problem: Super Growth Corp. has decided to increase its dividend to $5 per share beginning next year. The firm's growth rate is expected to be 12.5% for the foreseeable future. Investors require a rate of return on the firm's stock of 18%. Utilize the Gordon Model to calculate the expected price of the firm's stock.

a.    $64
b.    $75
c.    $83
d.    $91
e.    $98

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Finance Basics: Calculate the expected price of the firms stock

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