Value of Stock and Annual Dividend Payments
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A common Stock pays an annual dividend per share of $1.60. The risk-free rate is 5 percent and the risk premium for the stock is 4 percent. If the annual dividend is expected to remain at $1.60 per share. What is the value of the stock?
a. $17.18
B. $32.00
c. $40
D. none of the above.
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