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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Solution Summary
Dividend discount (constant growth) model has been used to value stock. The expert determines if a stock should be purchased.
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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 ??
Next year's dividend= Last ...
Purchase this Solution
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