Determining the dividend discount model


The copy service Quick Quality in Quantity (Q3) has a payout ratio of 80% and an expected return of 10% on new investments, and is expected to pay a dividend next year of $2.00. If Q3 is selling for $25 per share, what is its required return? What is the expected market value of a share of Q3 four years from now?

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Finance Basics: Determining the dividend discount model
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