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    What is the current price of XYZ's common stock?

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    The last dividend paid by XYZ Company was $1.00. XYZs growth rate is expected to be a constant 5%. XYZ's required rate of return on equity (ks) is 10%. What is the current price of XYZ's common stock?

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    https://brainmass.com/business/discounted-cash-flows-model/finding-current-price-xyzs-common-stock-267275

    Solution Preview

    Applying Gordon's growth model,

    Ks = {[do (1 + g)] / Pe} + g

    Pe = [do (1 ...

    Solution Summary

    This solution shows how to apply Gordon's growth model with formula, calculations and the answer.

    $2.19

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