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Gordon model the share price

Super Growth Corp. has decided to increase its dividend to $5 per share beginning next year. The firm's growth rate is expected to be 12.5% for the foreseeable future. Investors require a rate of return on the firm's stock of 18%. Utilize the Gordon Model to calculate the expected price of the firm's stock.
a. $64
b. $75
c. $83
d. $91
e. $98

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Super Growth Corp. has decided to increase its dividend to $5 per share beginning next year. The firm's growth ...

Solution Summary

The solution uses the Gordon Model to calculate the expected price of the firm's stock.

$2.19