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    Constant Growth Valuation

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    Thomas Brothers is expected to pay $0.50 a share (that is, D1 = $0.50). The dividend is expected to grow at a constant rate of 7% a year. The required rate of return on the stock, rs, is 15%. What is the stockâ??s current value per share?

    I have tried to solve this on my financial calculator but am not sure I am doing it correctly. Please Help.

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    Solution Summary

    The solution explains how to calculate the current value of stock using the constant growth valuation