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Constant growth stock for ABC company

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The last dividend paid by ABC company was $2.00. ABC's growth rate is expected to be a constant 4 percent. ABC's required rate of return on equity (KS) is 9 percent. What is the current price of ABC's common stock?

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Solution Summary

The expert determines the current price of the ABC's common stock with a rate of return on equity of 9 percent.

Solution provided by:
Jayant Kumar, MBA
Education
  • MBA, Indian Institute of Finance
  • Bsc, Madras University
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