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    Stock price today given expected dividends

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    A company expects to grow its dividend by 2% each year, forever. The expected dividend in year 1 is $2.00. Investors require a 6% rate of return on this stock. What is the stock price today?

    $25.66
    $36.23
    $50.00
    $22.96
    $47.02
    $19.27

    © BrainMass Inc. brainmass.com October 10, 2019, 3:46 am ad1c9bdddf
    https://brainmass.com/business/accounting-for-corporations/434950

    Solution Preview

    A company expects to grow its dividend by 2% each year, forever. ...

    Solution Summary

    The solution estimates stock price today given expected dividends using simple, step by step calculations.

    $2.19