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Pharmecology is about to pay a dividend of $1.35 per share. Its a mature company but future EPS and dividends are expected to grow with inflation, which is forecasted at 2.75% per year.

a. What is pharmecology's current stock price? The nominal cost of capital is 9.5%.

b. Redo part (a) using using forecasted real dividends and a real discounted rate.

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