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# key drivers affecting the stock price

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Calculate the expected stock price for each firm using the constant growth dividend discount model.

Today's dividend is \$10. The expected rate of return in the market is 15% and the firm's growth rate is 3%. The firm pays out half of its growth in dividends.

Firm B: Today's dividend is \$10. The expected rate of return in the market is 15% and the firm's growth rate is 12%. The firm pays out 10% of its growth as dividend.

Comment on the key drivers affecting the stock price.

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https://brainmass.com/economics/barriers-to-growth/key-drivers-affecting-stock-price-246208

#### Solution Preview

Price = Dividend x [(1+growth rate) / (expected return - growth rate)]

Today's dividend is \$10. The expected rate of return in the market is 15% and the firm's growth ...

#### Solution Summary

This solution outline the key drivers affecting the given stock price. Additionally the solution shows the steps for calculating the given stock prices.

\$2.19