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Common Stock Valuation

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Bollinger currently pays a dividend of $2.00 a share. Dividends are expected to grow at a rate of 12% per year for the next 5 years and then continue growing thereafter (indefinitely) at a rate of 6% per year.

What is the current value of a share of Bollingers stock to an investor who requires a 15% required rate of return?

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The solution calculates the value of a common share.

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Common Stock Valuation
Bollinger currently pays a dividend of $2.00 a share. Dividends are expected to grow at a rate of 12% per year for the next 5 years and then continue growing thereafter (indefinitely) at a rate of 6% per year.

What is the current value of a share of Bollingers stock to an investor who requires a 15% ...

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