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    apply the dividend discount model:

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    LetÃ?¢â?¬â?¢s apply the dividend discount model: P = D1/ (r-g)

    A company pays a dividend today of $4, and this dividend is expected to grow each year by 4%. The discount rate is 10%. What is the market price of the stock?

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    Solution Summary

    The expert applies dividend discount models.