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Dividend and Appropriate Pay

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The last dividend on Spirex Corporation's common stock was $4.00, and the expected growth rate is 10 percent. If you require a rate of return of 20 percent, what is the highest price you should be willing to pay for this stock?

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Solution Summary

This brief solution shows step-by-step calculations to determine the highest price on should pay for the common stock to make a rate of return of 20%.

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