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QUESTION
Fin 305 Chapter 8 question 2 Financial analysts forecast Safeco Corp.'s (SAF) growth rate for the future to be 12 percent. Safeco's recent dividend...
What is the value of Safeco stock when the required return is 14 percent?
Growth rate(g) 12% Recent dividend(Do) 1.60 Required return (ke) 14% Value of stock(Po)Using Gordon Growth model Value of stock ?Value of stock=Do(1+G)/(ke-g) 89.60