A stock is expected to pay a year-end dividend of 100 ie d1, Ask an Expert

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A stock is expected to pay a year-end dividend of $1.00, i.e., D1 = $1.00. The dividend is expected to decline at a rate of 5% a year forever (g = -5%). If the company is in equilibrium and its expected and required rate of return is 15%. What is the stock price today?

$10

$11.50

$15

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92406085

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