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Current value of a share

What is the current value of a share of a common stock to an investor who requires a 12% annual rate of return, if next year's dividend, D1, is expected to be $3 per share and dividends are expected to grow at an annual rate of 4% for the foreseeable future?

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What is the current value of a share of a common stock to an investor who requires a 12% annual rate of return, if next year's dividend, D1, is ...

Solution Summary

The solution calculates the current value of a share using the constant growth, dividend discount model

$2.19