Aeritech corporation paid dividends per share of 356 , Ask an Expert

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Ameritech Corporation paid dividends per share of $3.56 in 1992, and dividends are expected to grow 5.5% a year forever. The stock has a beta of 0.90, and the Treasury bond rate is 6.25%. (Risk premium is 5.5 %.) The stock was trading for $80 per share. What would the growth rate in dividends have to be to justify this price?

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