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The dividend is expected to grow at a constant rate of 7 a

NBC company is expected to pay a $1.60 per share dividend at the end of this year (i.e., D1=$1.60). The dividend is expected to grow at a constant rate of 7% a year from the current period to the foreseable future. The required rate of return on the stock, rs , is 15%. What is the price per share of NBC's stock today?

1. $20.00
2. $16.75
3. $25.00
4. $18.75

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Finance Basics: The dividend is expected to grow at a constant rate of 7 a

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Finance Basics: The dividend is expected to grow at a constant rate of 7 a

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