A stock is trading at 80 per share assume the market is in


A stock is trading at $80 per share. The stock is expected to have a year-end dividend of $4 per share D1 $4, and it is expected to grow at some constant rate gL throughout time. The stock’s required rate of return is 14% (assume the market is in equilibrium with the required return equal to the expected return). What is your forecast of gL?

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Financial Management: A stock is trading at 80 per share assume the market is in
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