Given a required return of 15%, what should the stock sell for today
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Biogenetics, Inc. plans to retain and reinvest all of their earnings for the next 30 years. Investors believe that in the beginning of year 31, the firm will begin to pay a dividend of $12.00 per share. The dividend is expected to remain at the same level thereafter. Given a required return of 15%, what should the stock sell for today?
A) $1.05
B) $1.21
C) $1.39
D) $42.00
E) $80.00
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