F corporation has a policy to grow the companyrsquos cash, Ask an Expert

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F Corporation has a policy to grow the company’s cash flows and consequently the dividend by 3 percent each year. In addition, F Corp is in an industry where risk is relatively low. Because of this low risk, a 9 percent return is reasonable as a required return. Assuming that F Corp will live up to these projections forever and expects to pay a $1.44 dividend per share at the end of the coming year. Using the formula in the book, a ballpark estimate of the value of this common stock is _____?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92852983

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