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    Common stock required rate of return

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    A firm pays a $4.90 dividend at the end of year one (D1), has a stock price of $70, and a constant growth rate (g) of 6 percent. Compute the required rate of return.

    Please show me the formula and steps to solve this problem so I can use it to help me solve other similar problems. Thank you.

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    Solution Summary

    Common stock required rate of return is investigated.