Problema stock is trading at 40 per share the stock is, Ask an Expert

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Problem:

A stock is trading at $40 per share. The stock is expected to have a year-end dividend of $6 per share (D1 = $6), and it is expected to grow at some constant rate g throughout time. The stock's required rate of return is 16% (assume the market is in equilibrium with the required return equal to the expected return).

Required:

Question: What is your forecast of g? Explain in detail.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91146182

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