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Calculate the fair value of common stock

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Question -

Q1. Calculate the fair value of common stock based on the following information:

Expected annual dividend = $1.50

Expected growth rate in earnings = 3.5%

Required return on investment = 9.5%

Q2. Calculate the price earnings (PE) ratio given the following data.

Expected dividend per share is $2.20,

Expected earnings per share is $5.30, and the growth in earnings is 2.5%, and the required return is 2.5%.

Reference no: EM133160199

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