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The Kummins Engine Company common stock has a beta of 0.9. The current risk-free rate of return is five percent & the market risk premium is eight percent. The CEO of the company is quoted in a press release as saying that the firm will pay a dividend of $0.80/share in the coming year & expects the dividends to grow at a constant rate of 7 percent for the foreseeable future. Using the constant growth model, determine the value that would you assign to this stock?

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Category:- Basic Finance
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