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Generate a constant dividend

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A common stock currently has a beta of 1.7, the risk-free rate is 7 percent annually, andthe market return is 12 percent annually. The stock is expected to generate a constant dividend of $6.70 per share. A pending lawsuit has just been dismissed and the beta ofthe stock drops to 1.4. The new equilibrium price of the stock.

Reference no: EM131318246

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