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QUESTION
A share of common stock is currently selling for $27.73. The last dividend paid was $1.60 per share. The marketrate of return is 10%. At what rate is...
A share of common stock is currently selling for $27.73. The last dividend paid was $1.60 per share. The marketrate of return is 10%. At what rate is the dividend growing?
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Suppose the growth rate be x%. Share Price27.7327.73 (10% - x%)2.773 - 27.73 (x%)2.773 - 1.601.1731.173 / 29.334.00% ======== Therefore, growth rate is 4% Last Dividend ( 1 + Growth...