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Stock valuation

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The Bradshaw Company's most recent dividend was $6.75. The historical dividend payment by the company shows a constant growth rate of 5 percent per year. What is the maximum you would be willing to pay for a share of its common stock if your required rate of return is 8 percent?

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The solution explains how to deteremine the value of the stock

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What we would be willing to pay is the present value of dividends. Since the dividends grow ...

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