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Balloons Inc normally pays a quarterly dividend. The last such dividend paid was $1.00, all future quarterly dividends are expected to grow at 8 percent, and the firm faces a required rate of return on equity of 13 percent. If the firm just announced that the next dividend will be an extraordinary dividend of $2.20 per share that is not expected to affect any other future dividends, what should the stock price be?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92790432

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