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Laser Optics will pay a common stock dividend of $1.60 at the end of the year (D1). The required rate of return on common stock (Ke) is 13 percent. The firm has a constant growth rate (g) of 7 percent. Compute the current price of the stock (P0).

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Solution Summary

Compute the current price of the stock in this case.

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Manal Elkhoshkhany, MBA
Education
  • BA, Ain Shams University, Cairo Egypt
  • MBA, California State University, Sacramento
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