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The last dividend was $2. The dividend is expected to grow steadily at 8 percent. The...

The last dividend was $2. The dividend is expected to grow steadily at 8 percent. The required return is 16 percent. What is the price of the stock today? What is the dividend in 5 years, and the price in five years? If the stock is selling at $30, is it worth buying? Why?

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Expert Solution

Price stock today-13.5
Dividend in 5 yrs-11.72
Price after 5 yrs-17rs
Not worth buying at 30

ekkarill92 answered 2 years ago
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