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    Constant Growth Valuation

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    Boehm Incorporated is expected to pay a $1.70 per share dividend at the end of this year (i.e., D1 = $1.70). The dividend is expected to grow at a constant rate of 4% a year. The required rate of return on the stock, rs, is 13%. What is the value per share of the company's stock?

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    Solution Preview

    Using Constant Growth Model,

    Stock price = Expected ...

    Solution Summary

    The solution finds the value per share using constant growth valuation.