The new dividend after 12 months will represent d1 the


Sterling Corp. paid a dividend of $.80 last year. Over the next 12 months, the dividend is expected to grow at a rate of 10 percent, which is the constant growth rate for the firm (g). The new dividend after 12 months will represent D1. The required rate of return (Ke) is 14 percent. Compute the price of the stock.

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Finance Basics: The new dividend after 12 months will represent d1 the
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