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Luna Health Corp just announced the dividend for next year will be $3.45. The dividend is...

Luna Health Corp just announced the dividend for next year will be $3.45. The dividend is expected to grow at 3.8% for the sustainable future and the expected return is 11.15%. The value of Luna is closest to:

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a

$46.94.

b

$48.72.

c

$30.94.

Solutions

Expert Solution

Value of Luna = Expected dividend / (Required rate - Growth rate)

= 3.45 / (11.15% - 3.80%)

= $46.94

Correct choice A

jeff jeffy answered 2 years ago
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