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    Required return is implied by the constant growth model

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    What required return is implied by the constant growth model for a stock that is selling for $25.00 per share and is expected to pay a single cash dividend next year of $1.80, and whose growth in dividend payments is expected to be 2% per year forever?

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    Solution Summary

    The expert determines the required return implied by the constant growth model.

    $2.19

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