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    Stock Valuation

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    Wayne, Inc.'s outstanding common stock is currently selling in the market for $33. Dividends of $2.30 per share were paid last year, and the company expects annual growth of 5 percent.

    A. What is the value of the stock to you, given a 15 percent required rate of return ?
    B. Determine the expected rate of return for the stock.
    C. Should you purchase this stock? Explain.

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    https://brainmass.com/business/beta-and-required-return-of-a-project/stock-value-determine-purchasing-opportunities-304917

    Solution Preview

    Wayne, Inc.'s outstanding common stock is currently selling in the market for $33. Dividends of $2.30 per share were paid last year, and the company expects annual growth of 5 percent.

    A. What is the value of the stock to you, given a 15 percent required rate of return ??

    Next year's dividend= Last ...

    Solution Summary

    Dividend discount (constant growth) model has been used to value stock. The expert determines if a stock should be purchased.

    $2.19

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