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    Value of a share of stock

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    Suppose that you are interested in buying the stock of a company that has a policy of paying a $6 per share dividend every year. Assuming no changes in the firm's policies, what is the value of a share of stock if the required rate of return is 11%?

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    Since the stock pays a constant amount every year, it is a ...

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    The solution explains how to calculate the value of a share of stock.