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    Calculating C0ommon stock price

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    A share of common stock has just paid a dividend of $2. If the expected long-run growth rate for this stock is 5%, and if investors required rate of return is 10.5%, what is the stock price?

    a. $35.39
    b. $38.80
    c. $37.23
    d. $38.18
    e. $39.14

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    Solution Preview

    Use the discounted dividend model for growth stocks, here you need ...

    Solution Summary

    This solution goes through how to calculate common stock price.