(Answered) Question investors currently require an expected return of

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Question: Investors currently require an expected return of 12 percent on the shares of Dime Corporation, whose dividend payments for this year are expected to be $0.36. The current market price per share is $14.

(a) What is the implied long-term average growth rate of dividends?

(b) If annual growth expectations for Dime increase to 10.5 percent, at what price should the shares trade?

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