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    Current price of a share

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    Consider the stock of Davidson Company, which will pay an annual dividend of $2 one year from today. The dividend will grow at a constant annual rate of 5 percent, forever. The market requires a 12 percent return on the company's stock.

    a. What is the current price of a share of the stock?
    b. What will the stock price be 10 years from today?

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    https://brainmass.com/business/business-math/current-price-of-a-share-64261

    Solution Preview

    What is the current price of a share of the stock?
    Po=Div1/(ke-g)
    ke=cost of ...

    Solution Summary

    This provides the steps to compute the current price of a share

    $2.19

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