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Problem:

IBIS Corporation has had dividends grow from $2.50 per share to $6.00 per share over the last 10 years (the $5.00 per share dividend was paid yesterday; that is, D0 = $6.00). This compounded annual growth rate in dividends is expected to continue into the future forever.

Required:

Question: If the current market price of IBIS's stock is $45.00 per share, what rate of return do investors expect to receive from buying IBIS stock?

Note: Explain all steps comprehensively.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91174705

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