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Intrinsic Value of Common Stock

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1. Find the intrinsic value of a common stock that last paid a quarterly dividend of $.03 if there is no expected growth in dividends and your required rate of return is 10%.

2. What if dividends are expected to grow at a rate of 6% per year indefinitely.

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The solution computes the intrinsic value of common stock.

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The intrinsic value of the stock is the present value of its future cash flows.

1. Intrinsic Value of ...

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