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Details regarding Stock valuation

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Gerald's Travel Service just paid $1.79 to its shareholders as the annual dividend. Simultaneously, to company announced that future dividends will be increased by 3.2 %. If you require a 10.5% rate of return, how much are you willing to pay to purchase one share of this stock?

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The price will be the present value of all dividends, since the growth rate in ...

Solution Summary

The solution explains how to calculate the price of stock.

$2.19