Suppose you buy a stock that will pay an annual dividend


Suppose you buy a stock that will pay an annual dividend next year of $5. This firm's dividends are expected to grow at a rate of 6% per year. Investors' required rate of return for this stock is 16%. How much is this stock worth? a. $56.18 b. $50.00 c. $53.00 d. $33.33

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Financial Management: Suppose you buy a stock that will pay an annual dividend
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