You expect the dividend to grow at a rate of 5 per year


You were offered to purchase a stock that paid a $2.00 dividend yesterday. You expect the dividend to grow at a rate of 5% per year into a perpetuity. If the appropriate rate of return for the stock is 11%, what is the market value of the stock?

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Finance Basics: You expect the dividend to grow at a rate of 5 per year
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