A stock pays a year one dividend of 1 the dividend is, Ask an Expert

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A stock pays a year one dividend of $1. The dividend is expected to increase,but the growth rate is subject to uncertainty. Each year after the first, with probability 2/3 the dividend growth rate is 2% and with probability 1/3 there is no growth in the dividend. If the current price of the stock is $40 per share, what is the implied cost of capital?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92714950

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